Friday’s Commentary On Gold (GLD)
$GLD
Gold dove to a more than 2 week low Thursday, after data showed the US economy grew mostly in line with expectations in Q-3, and as the US Fed indicated that a December rate hike was still in the mix.
The data showed personal consumption rose 3.2% in Q-3, just below expectations for a 3.3% gainer, and compared to a 3.6% increase in the preceding Quarter.
At the same time, the US Department of Labor said the number of individuals filing for initial jobless benefits increased by 1,000 last week to 260,000. Analysts had expected jobless claims to rise by 4,000 to 263,000 from the prior week’s 259,000.
The Bulls hold a slight advantage over Bears in here.
The percentage of long open positions has been completely unchanged at 52% since Thursday of the prior week, which gives the Bullish traders a 4% lead.
Note: At these prices Gold has priced in a Dec rate hike. 1,150 is a big mark on the Southside, and on the Northside I believe 1,165 will be pretty hard to crack and break.
India, the world’s 2nd-biggest Gold buyer after China, imposed the import restrictions last year to avert a trade deficit crisis that pushed the Rupee to record lows.
“Restrictions placed on import of Gold… stand withdrawn with immediate effect,” India’s central bank said in a statement on Saturday, 29 November.
Support for Spot Gold comes from jewelry demand from India in the lead up to and during the wedding season, which starts again in late September. India did record a 176% increase in Gold imports in August to US$2-B from about US$756-M.
Overall, the impact of wedding season Spot Gold buying has faded in recent times as India is no longer the world’s largest Gold consumer, partly because of the on-going government import restrictions on precious metals. If they are further relaxed, perhaps India will regain its Top spot.
India’s Akshaya Tritiya festival considered by India’s more than 900-M Hindus as an auspicious day to buyGold and Silver, fell on 21 April this year. Bullion is bought in India during festivals and marriages as part of the bridal trousseau or gifted in the form of jewelry by relatives.
Stay tuned…
HeffX-LTN
Paul Ebeling
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