Emerging market demand for gold has not picked up yet. For instance, China has shown little demand, with the Shanghai Gold Exchange seeing little growth in volume. While the higher prices may have deterred Asian buyers, demand could pick up if prices persist in going higher, analysts said.
India, one of the world’s largest gold consumers, could be set to lower its import tax on bullion, which could be major catalyst for gold prices.
Gold’s technical outlook is also tepid at best.
“Gold prices to nearly 7-week highs on Thursday, but saw prices give up the gains by the end of the session. While prices are holding above the 20-day moving average, the market is still well below the 200-day moving average, which is currently near the 1274.00 price level. While the 14-day RSI remains strong, with a current reading above 60, we may start to see this momentum indicator turn lower unless a new-multi-week high is made to end the week. The November 16 high of 1236.10 now appears to be the next major resistance level for the February contract, with chart support seen at the January 5 low of 1163.60,” adds Options Express.
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Tom Lydon’s clients own shares of GLD.