Further, this might have unleashed some “pent-up demand” from market participants who have been patiently waiting to buy gold, said Daniel Pavilonis, senior commodity broker with RJO Futures. “It shot up fairly quickly,” he said. Buy stops, or pre-placed orders activated when certain chart points are hit, added to the market’s strength.
The weaker showing by the stock market in recent days might also be prompting some investors to dip their toes back in the gold market, Nabavi said. He also cited indications of at least some pick-up in physical gold from India, which he characterized as “extremely quiet” in recent weeks.
Views Mixed On Whether Gold Has Formed A Bottom
While gold has held around an important chart-support area, Lesh said “it is a little early to declare victory just yet.”
In an overnight research note before gold hit its session highs, UBS suggested gold may not have hit its low yet since physical demand had not picked up significantly during the recent pullback.
Pavilonis said he envisions more gold strength at least in the near term. But eventually, he suggested, a gold rally may stall as the dollar keeps strengthening, particularly if Greek citizens keep dumping their euros to move to other currencies.
To read the full article with Dan comments, please go to Kitco.com
Series 3 Licensed
Senior Commodities Broker
Daniel started his career as a broker with Lind-Waldock in 2007. He is well diversified in the markets with the indexes and currencies amongst his favorites. Daniel can often be found quoted in industry sources, such as Bloomberg, Dow Jones Newswires, WSJ and Futures magazine..... Read More
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