Gold ETP Holdings In Third Weekly Rise - Now Positive On The Year
Saxo Bank | Mar 17, 2014 07:37AM ET
Holdings in exchange traded products (ETP) backed by physical gold rose for a third consecutive week as of last Friday, according to data supplied by Bloomberg. The weekly rise of 12.3 tons was the biggest since November 2012 and it took the total holdings up to 1766.4 tons, the highest level since December 27.
Gold spiked higher during Asian hours on the election news from Crimea and the news from China about the widening of the USD/CNY band. After reaching a high at USD 1392.2/oz, profit-taking set in and this was not least due to the limited adverse reaction to these news items in other asset classes. In China, the interest for physical gold has been relatively subdued in recent days with the price of Au9999 on the Shanghai Gold Exchange trading at a discount to spot gold.
On this basis, it is abundantly clear that safe haven flows related more to Ukraine than physical interest in Asia. This, together with a weaker dollar, have been the drivers during the past few weeks. As a result, gold has breached several technical levels, which has further increased the positions among momentum traders. ETP investors have also been dipping their toes back into the market. However, with holdings now only a few tons above the level they were at at the beginning of the year, it shows the extent of the damage that was caused by the dramatic sell-off in 2013.
Looking ahead, the Ukraine crisis and especially the tensions between Russia and the West should keep the metal supported ahead of the first Federal Open Market Committee (FOMC) meeting (Wednesday) with US Federal Reserve chairman Janet Yellen at the helm. The current rate of monthly taper by USD 10 billion is expected to be maintained. For now, the yellow metal is stuck between support at USD 1355/oz and psychological resistance at USD 1400/oz. ahead of the August high at USD 1434/oz.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.