eft Securities - Gold price recovers on surge in physical demand

Gold price recovers on surge in physical demand

 Precious metal prices partly recovered their recent losses last week, as depressed price levels were perceived as an attractive entry point by physical buyers and bargain hunters. The longer-term fundamental outlook for gold has not changed and appears robust in our view, despite the sharp falls seen in recent weeks. While gold might still need a catalyst to break through the US$1,500oz level, recent valuations are becoming increasingly attractive for physical buyers as evidenced by the high volumes on the Shanghai Gold Exchange, surging bar demand in mainland China and Hong Kong and by record US gold coin sales. Any
sign of easing by the European Central Bank this week and/or weak employment data from the US could be short-term catalysts to further gold price upside.

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