Gold Demand Heating Up, Eyes Turn To Yellen
Today’s Spotlight Market
Gold futures continue to grind higher, despite disappointing economic data.? Emerging market currency weakness and safe haven buying have been driving forces behind the recent strength in precious metal prices.? While recent economic data has not bad enough for traders to hit the panic button, it has been soft enough for investors to quietly buy up metal. Today will be an interesting day for precious metal traders, as it marks the first time Janet Yellen will face Congress since becoming the new head of the Federal Reserve.? Her testimony will be closely watched, especially for mentions of Fed tapering of the asset purchase program.
Fundamentals
The fundamental outlook for Gold has improved slightly in recent weeks.? The China Gold Association indicated that the country?s demand for the yellow metal had increased by 41 percent to a recorded 1,176.4 metric tons in 2013.? Chinese Gold production surged in 2013 to 428 metric tons, but this only made up 36 percent of domestic demand.? Because of this, China will continue to be a major importer of Gold going forward.? The World Gold Council had indicated that China surpassed India as the world?s largest Gold consumer.? US Mint had sold 62,500 Gold coins in the month of January, which is a 63 percent increase over December and the highest sales figure for the American Eagle coins since April.? Silver coin sales by the US Mint had sold 912,388 troy ounces in January, up from 845,941 in December.? Gold may find continued support from the Platinum market which is facing labor turmoil in South Africa.? Talks to end a strike that has derailed production in the world?s largest Platinum mines has been postponed until later this week.
Technical Notes? -? View Today’s Chart
Turning to chart, we see the April Gold contract continue to grind higher since making a relative low in late December.? Prices are now entering a band of resistance between 1270 and 1289, which will be a test for the market in the near-term.? Prices closed above the 100-day moving average yesterday; however, the April Gold contract hardly did so in convincing fashion.? Several solid closes above the 100-day moving average may be viewed a bullish over the intermediate term for Gold.
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