Physical gold buying is largely on the sidelines

Gold are enjoying some support from safe-haven demand as issues in Eurozone once again weigh on investors’ minds. The Greek Prime Minster appears to be struggling to garner political support for the required austerity measures that would secure extra funding from international lenders. In addition, no clear agreement has been forthcoming on either private or official sector involvement in a Greek debt restructuring.

Despite the Eurozone concerns, the euro has been relatively stable against the dollar, which has allowed the gold to benefit from safe-haven interest without too much hindrance from a strengthening dollar. Physical gold buying is largely on the sidelines, with only minimal interest forthcoming. Base on Standard Bank Physical Gold Flow Index is holding steady, only marginally inside positive territory—a positive value indicates net buying in the market. As mentioned in the base metals section, all eyes are on today’s US non-farm payrolls data. We feel that the likelihood of a disappointing number is slightly greater. This would benefit precious metals, especially gold and silver, as it would strengthen the Fed’s case for an extended period of monetary accommodation.

Gold support is at $1,746 and $1,733. Resistance is $1,768 and $1,775.