Eurozone Situation Help Push Gold Price Up

Gold remains within $1,170 – $1,190; we expect this range to hold. However, we have been looking for a retracement in gold from its all-time highs, and now believe that the retracement has largely run its course.

The strength in gold demand on approach of $1,170 is a positive sign. With gold above $1,200, physical buying interest had dried up. But we are once again witnessing some buying interest and re-stocking out of Asia. The buying interest in the physical market is not great yet, but could increase should gold fall further. We would view a dip towards $1,170 as a buying opportunity.
The futures market remains supportive of gold. COMEX gold has seen the net long non-commercial position decline to 32.9% of open interest, down from 33.3% the previous week.

Current speculative length is below the average of 36% over the past 12 months. Looking at the futures market, gold is not overbought yet.

Gold support is at $1,171 and $1,158. Resistance is at $1,193 and $1,201.

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