LONDON (Commodity Online): Recent performance of gold has not matched investor expectations due to a stronger dollar and US Fed Reserve giving no indications of further monetary easing.
“Gold disappointed by not closing above its 60-day and falling abruptly on Thursday; back to ranging 1530-1630. Support 1563, 1526; Resistance 1613, 1650 Medium term: Neutral,“ according to Barclays Capital.
Price forecast: Q2 12: $ 1665/oz; 2012 annual average: $ 1716/oz.
The macro environment and investor inflows continue to be bullish for gold but fundamentals are bearish for the commodity.
After the net redemptions suffered in May, ETP holdings have stabilised and recorded modest net inflows thus far in June. Holdings are up 7 tonnes.
The latest CFTC data reflect positioning until 5 June, thus before the sell-off on Thursday. For the week ending on Tuesday, non-commercial positions were up 18.2k lots, driven primarily by the establishment of fresh long positions (16.5k lots), rather than short covering activity. Net fund length is at its highest since 1 May, with gross longs at their highest since mid-March; however, overall positioning remains relatively light at 30% of open interest.
Following the pickup in gold coin sales last month (53koz), the US Mint has reported sales of 10.5koz thus far in June, a strong start to the month. YTD sales: 294koz. 2011 full year: 1Moz, Barclays Capital said in its report.