Financial Daily from THE HINDU group of publications
Wednesday, Jan 04, 2006
Financial Daily from THE HINDU group of publications Wednesday, Jan 04, 2006 |
|
|
|
|
|
|
|
Agri-Biz & Commodities
-
Precious Metals Gold's upward thrust needs to be watched G. Chandrashekhar
Mumbai , Jan 3 GOLD started extremely strongly today with prices reaching $523 an ounce in the London market forenoon trade after Asian markets tested higher. The market was boosted partly by a weaker dollar. Analysts said near-term resistance was seen at $525/oz. Overall, prices gained 20 per cent in 2005 and there is room for further gains because of continuing strong fund interest. Why are the funds interested? A variety of reasons are proffered including inflationary concerns, fears of economic slowdown, hopes of large Asian central bank buying, soaring physical demand, supply side constraints and so on. Many market observers are sceptical about some of the reasons listed by fund managers. One analyst said, "There is a lot of speculative froth in the gold market." As long as the upward momentum continues, the funds would remain committed; but once the upward trend stalls, there could be a major correction. The sizeable speculative long position suggests that the downward correction when happens would be a major one. Although investors continued to liquidate some of their large long positions, the net non-commercial length is still large (480.6 tonnes) as per latest CFTC data. The gold market needs to be watched with caution.
More Stories on : Precious Metals
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|