Gold Bearish Outlook Extended as Price Nears $1,200: Commodities – Bloomberg 12-06-13

Salient to Investors:

Investors cut holdings in gold ETPs every month this year, erasing $69.4 billion. Hedge funds et al are the least-bullish since June 2007.

John Paulson told clients last month that he personally would not invest more money in his gold fund. Goldman Sachs forecast prices will drop to $1,110 in 12 months.

Standard Bank said that while gold should be sold into rallies, lower prices make buying the metal more attractive by the day.

BullionVault’s gauge of client buying was at 54 last month, near a 6-month high of 54.3 set in October and the peak of 71.1 in September 2011 when gold reached a record $1,921.15.

Mark O’Byrne at GoldCore said gold looks oversold, and purchases may increase in China ahead of the Lunar New Year festival at the end of January. The World Gold Council said consumer demand in China rose 30 percent in the 12 months through September and is set to overtake India as the world’s biggest user this year.

Gold’s directional-movement indicator shows a bearish trend strengthened over the past month, but its 14-day relative-strength index fell earlier this week to a level suggesting it may be poised to rebound.

Ole Hansen at Saxo Bank said US growth seems to be gathering momentum.

Credit Suisse said the market may be underestimating the probability of a vote to taper this month, and the dollar may have begun a multi-year bull market.

Economists expect US economic growth to accelerate to 2.6 percent in 2014, from 1.7 percent in 2013, helping global expansion to the highest since 2011. Barclays said supply for all six main industrial metals will increase in 2014, resulting in surpluses for copper, nickel and zinc.

Jeremy Baker at Harcourt Investment Consulting said people are still relatively optimistic towards the US economy, while the fundamentals for commodities are actually improving, though concerns linger that there are some supply overhangs in commodities.

Read the full article at http://www.bloomberg.com/news/2013-12-06/gold-bearish-outlook-extended-as-price-nears-1-200-commodities.html

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Investors cut holdings in gold ETPs every month this year, erasing $69.4 billion. Hedge funds et al are the least-bullish since June 2007.

John Paulson told clients last month that he personally would not invest more money in his gold fund. Goldman Sachs forecast prices will drop to $1,110 in 12 months.

Standard Bank said that while gold should be sold into rallies, lower prices make buying the metal more attractive by the day.

BullionVault’s gauge of client buying was at 54 last month, near a 6-month high of 54.3 set in October and the peak of 71.1 in September 2011 when gold reached a record $1,921.15.

Mark O’Byrne at GoldCore said gold looks oversold, and purchases may increase in China ahead of the Lunar New Year festival at the end of January. The World Gold Council said consumer demand in China rose 30 percent in the 12 months through September and is set to overtake India as the world’s biggest user this year.

Gold’s directional-movement indicator shows a bearish trend strengthened over the past month, but its 14-day relative-strength index fell earlier this week to a level suggesting it may be poised to rebound.

Ole Hansen at Saxo Bank said US growth seems to be gathering momentum.

Credit Suisse said the market may be underestimating the probability of a vote to taper this month, and the dollar may have begun a multi-year bull market.

Economists expect US economic growth to accelerate to 2.6 percent in 2014, from 1.7 percent in 2013, helping global expansion to the highest since 2011. Barclays said supply for all six main industrial metals will increase in 2014, resulting in surpluses for copper, nickel and zinc.

Jeremy Baker at Harcourt Investment Consulting said people are still relatively optimistic towards the US economy, while the fundamentals for commodities are actually improving, though concerns linger that there are some supply overhangs in commodities.