International markets are marked by lower trading activity and narrower ranges.
This is caused by coming Christmas holidays. Market participants don’t feel like risking and are content with summary results of the year, on the one hand. On the other, minor speculative transactions don’t reflect sentiment of managers of large hedge funds. Positive figures for the Eurozone and the US are subjecting gold to downward pressures.
According to some data, the Hindus were actively buying gold during the Asian session today which pushed its price to $1,378.5 an ounce. Nevertheless, the overall pre-New-Year feeling remains uncertain which, of course, is primarily connected with an outflow of funds from the metal market. At the same time, the financial community is dominated by an opinion about short-term pressures on gold as inflationary expectations and the sovereign debt crisis in the Eurozone stir up investor interest in this metal. The silver market continues consolidating around $29 an ounce. The situation with silver is equivocal, though the general sentiment in the market, according to a number of analysts, remains bullish. Based on some data, platinum is supported by Indian jewelers. However, the price hasn’t made any significant move in a couple of days already and is consolidating around $1,700 an ounce.
The macroeconomic situation: the official sector that purchases gold includes central banks, the International Monetary Fund and investment funds.
Official data of transactions of central banks in state markets of gold are mainly not disclosed. Therefore, an accurate estimate of the total volume of gold purchases made this year cannot be arrived at. In a word, we don’t have information as far as gold purchases by a central bank are concerned.
For example, China announced that by April last year its central bank had acquired 454 tons of gold over the past six years but decided to disclose this information only now. Many observers believe that China continues regularly buying gold in large quantities.
Saudi Arabia also purchased a substantial volume of gold, 180 tons, over the past couple of years but had kept silent on its gold operations until June this year. It is very likely that the currency and financial administration of Saudi Arabia also continues buying gold along with some other oil producers.
In general, an average speculator is in the dark about activities of central banks in the gold market. The only thing we can find out in this respect is that the list of countries actively buying gold continues growing since 2009. The list of such countries includes, but is not limited to, Russia, Kazakhstan, India, Sri-Lanka, Mauritius, Chile, the Philippines, Thailand and Bangladesh. South Korea recently announced in was considering increasing its official reserves.
It is also known that IMF gold under the sellout program that started in 2009 and provided for sale of 403.3 tons has almost been exhausted. In late October this year the IMF had only 32.7 tons left – the rest had been sold. This raises a reasonable question: how will the market react after a temporary source such as the IMF gold reserve dries out?
Technically, a final spurt to 1350 is possible:
The Market Sentiment Analysis Department within the Masterforex-V Trading Academy
Source: Market Leader
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