Tags: Gold | China | India | sentiment

CNBC: Investor Sentiment in Gold May Be Turning Positive

By    |   Thursday, 15 August 2013 07:59 AM

Investor sentiment toward gold may be shifting to the long side, as gold prices have risen sharply in recent weeks, CNBC reported.

Gold has jumped 13 percent since nearly hitting a three-year low in June, and was at $1,337 in early trading Thursday.

The precious metal has benefited from short covering and heavy buying especially from China, according to CNBC. The China Gold Association reported gold consumption rose 54 percent in the first half of 2013.

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"The physical demand for gold is robust and we're seeing premiums in Asia that you don't see in other parts of the world," Barry Dawes, head of resources at Paradigm Securities, told CNBC.

"The physical market for gold is now really tightening up and the shenanigans being played by hedge funds and bullion and investment banks may just be coming to an end."

However, Reuters reported India imported $2.9 billion of gold and silver in July, down about one-third relative to July 2012.

Another potential pitfall for gold prices is the impact of the Federal Reserve's timing to cut back its monthly bond-buying program, which could result in higher Treasury yields and discourage gold investments, CNBC noted.

The Wall Street Journal agreed ongoing Chinese purchases have helped keep gold prices stable since a steep selloff in April.

"Without strong Chinese physical demand, gold prices would likely be trading at a much lower price now," Joyce Liu, an analyst with Chicago brokerage Phillip Futures, told The Journal.

Gold supporters have been betting that ultra-loose Fed monetary policy would lead to inflation and attract investors seeking a hedge against higher prices, The Journal noted, but that hope has not been realized and inflation has been weak.

In New Delhi, The Indian Express said rising seasonal demand from jewelers and others has supported gold prices in India. The price increase has been compounded by an effort by the government to limit gold imports, the newspaper said.

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Investor sentiment toward gold may be shifting to the long side, as gold prices have risen sharply in recent weeks, CNBC reported.
Gold,China,India,sentiment
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2013-59-15
Thursday, 15 August 2013 07:59 AM
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