UNITED STATES October 22 2013 2:35 PM
 
NEW YORK (Scrap Register): Gold is likely to struggle to build upon its recent rally in a sustained fashion unless physical demand improves and investor sentiment turns more favorable, said Barclays Capital in a research note.

According to Barclays, physical demand has not been as strong as normal during a seasonally strong period in India, and volume on the Shanghai Futures Exchange fell for most of the last week, until Friday.

The bank described that the macro environment for gold as bullish, noting December is now the most likely scenario for tapering of Federal Reserve quantitative easing but that the recent U.S. political crisis over debt and budget issues increases the likelihood of a delay into 2014. The foreign-exchange market, investor flows, fundamentals and technicals as all neutral.

“Gold is caught in the middle of a $1,170 to $1,440 range. Within the range, given the broader signs of USD weakness emerging, price is likely to stay buoyant for a return to $1,345/50. The bias (is) marginal, however, as the medium-term view remains neutral,” Barclays concluded.