Physical buying remains on the sidelines


Despite ongoing unrest in Libya, appetite for risk appears to be making a tentative reappearance. In addition, the possibility that OPEC might increase output has tempered the rally in oil prices, easing concerns over rising global inflation. The factors have seen investor interest in precious metals dwindle, pushing the complex marginally lower. Physical buying remains on the sidelines, which is also weighing on gold and silver. However, we maintain that this dip is temporary and that the potential for more upside exists as long as the conflict in Libya remains unresolved and as the political upheaval spreads to other oilproducing countries in the MENA region.

Gold support is at $1,424 and $1,417. Resistance is at $1,439 and $1,445.

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