Gold rally to continue, despite recent selloffs: Commerzbank
Washington (Platts)--30Nov2012/1221 pm EST/1721 GMT
Though gold futures have yet to recover from their $26/oz drop earlier
this week, prices will continue to trend higher next year, partly from demand
by exchange-traded funds, analysts with Commerzbank said Friday.
COMEX gold for February delivery, the active month, plummeted $26/oz
Wednesday after a large sell order was placed at the open of New York trade.
The sell order, consisting of 7,800 contracts, amounted to 24 mt of gold.
Though February gold regained $10 of the loss on Thursday, prices
tumbled Friday morning back to key support levels in the lower $1,700s.
"The reason why the price is not climbing more sharply is that there is
currently greater demand for cyclical metals," Commerzbank analysts said in a
report, referring to base metals and precious metals with industrial
applications, like palladium.
But physical inflows into gold exchange traded funds in recent days
have been substantial, Commerzbank analysts said. At the end of Thursday, net
inflows into major gold ETFs have totaled 13 mt, 4.8 mt of which went into
SPDR Gold Shares, the world's largest gold ETF.
"ETF investors, who are generally regarded as taking a longer-term
view, are proof that gold remains in high demand as a store of value and a
safe haven despite all the price fluctuations," Commerzbank analysts said in
the report. "We are confident that the gold price will continue to climb in
In a separate report released Thursday, Commerzbank analysts also
pointed loose monetary policies being pursued by major central banks and
geopolitical risks as additional drivers of gold prices.
"We are confident that the gold price will achieve, and indeed exceed at
least temporarily, the $2,000/oz mark next year," they said.
--Nick Jonson, firstname.lastname@example.org
--Richard Rubin, email@example.com
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