The African Standard Bank released its daily commodities analysis and commentary for August 6. The report foreshadowed the base and precious metals market movement.
Gold price was below $1,300 today, which provoked the Chinese physical demand to pick up today. Premium rose from $22.83 per ounce on yesterday to $26.25 this morning. SGE Premium for $1,330 gold last week was around $14.87. Physical gold may not be able to provide sufficient support for gold if “large-scale” ETF liquidation continued.
By studying the U.S. 10-year bond yields, the bank analysts believe the Fed tapering will be in September. The bond yield market is a key indicator of what the market believes. Moreover, the U.S. non-farm payrolls numbers and the absence of talk about QE tapering in last week’s FOMC statement casted doubts about the timing of tapering.
Gold price technical support is at $1,290 then at $1,283 while technical resistance $1,317 and $1,330.