The African Standard bank released its daily commodities analysis and report for August 20. The report focused on analyzing the base metal movement.
Gold is holding up well against the rising U.S. 10-years bond yields and other factors gold investors consider bearish. The price is testing the 100-day Moving Average (MA) at $1,373. A close above this particular level pooled with steadying gold ETFs holdings and physical demand, the possibility of seeing gold testing $1,400 and even higher is becoming more likely. The first step of this rally is to see speculative longs entering the gold market.
The Shanghai Gold Exchange premium for gold eased on Tuesday further to $18 per ounce from $19 per ounce yesterday and $22 per ounce last week. This indicates demand easing on gold above $1,300.
The next FOMC meetings will be monitored closely, to determine the probability of tapering the U.S. bond-purchasing program, and to determine the speed of such tapering. It’s highly possible for the tapering to start in September, but at which pace is more of the focus recently.
Gold technical support is at $1,370 and $1,340 while the technical resistance is at $1,380 and $1,400.