INDIA July 20 2017 11:16 AM
NEW YORK (Scrap Register): UBS looks for gold to continue drawing support, commenting that the metal’s ability to hang onto recent price levels is encouraging.
“We had seen bits and pieces of interest from more strategic players around the recent lows -- although there appeared to be no urgency to build large positions, it suggests to us that gold continues to be viewed as a diversifier and this should help keep the market supported overall,” the bank added.
Physical gold demand has been steady at best, although seasonal patterns suggest not much can be expected at the current time.
A more dramatic selloff, perhaps towards the lows at the start of the year, is probably needed to get a reaction from physical buyers at this point.
Looking ahead though, indicators of healthy demand in India and expectations of a good monsoon suggest that buying should pick up during the wedding and festival season in the coming months.
Still, UBS added, Indian gold imports for the first half of the year of around 525 tons were strong compared to past years, which could mean second-half volume will be slower.
Overall UBS expects gold demand in India this year to be around historic averages.