CS Precious Metals 29 January 2014

Commodity Spotlight Precious Metals

Despite the good start into the year, gold requires patience

The gold price had a positive start into the new year. This was attributable to the temporary end of the equity market rally, the fall of real interest rates and robust Chinese purchases ahead of the Chinese New Year. Also, sentiment has improved slightly among speculative financial investors. Gold ETFs, in contrast, have seen outflows until recently. The gold price looks set to come under pressure again in the near-term. However, India could relax its restrictions on gold imports in the second quarter. ETF outflows should likewise come to an end. This should be conducive to a sustained upwards movement in the gold price in the second half of the year.
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