Precious metals expert in National Bank of Dubai said that gold price chances to withstand at $1,400 are too low.
Gerhard Shcubert, head of the precious metals at Emirates NBD, said in his weekly commentary that gold couldn’t hold gains above the $1,400 mark. This “disappointing” action especially after the last dip on Friday, weaken the chances of gold to rally this year.
He said that’s he couldn’t find a reason for gold price to rise again this year. The US Federal Reserve won’t reduce their QE program pace soon in 2013.
Still, India, the world number one gold consumer, is aggressively taking measures to curb gold imports. While in China, the second largest gold consumer, modest future purchase are in place, but expected not to be strong enough to rally gold price. These two main focal points, along with the US, represent more than half the world’s demand on physical gold.
The current rally in the US equity markets represents an investment alternative to the years-low interest rates. On the other hand, gold is a safe haven asset during recessions and crises. Some Investors interpret the US economic data released so far as sign of the world economy recovering. That deduction is bearish for gold, but the record-high sales of gold bullion coins in the US suggests that faith in the full recovery of the US economy is weakening.