Deutsche Bank: Central-Bank Demand Supportive For Gold

Central banks are proving to be a “powerful” source of gold demand, significantly outstripping purchases in previous years, says Deutsche Bank. “We are therefore maintaining are bullish view to the metal,” the bank says. Deutsche Bank suggests central-bank activity has enabled gold to consolidate over the past six weeks even as private-sector flows into exchange-traded products stagnated and net speculative length among futures traders fell to a three-year low. “The decline in net length in the gold market over the past several quarters has made for a much ‘cleaner’ market in our view and we expect that despite near-term pressures in the market due to heightened EU risks (and thus the modest outperformance of the USD vs. gold), we believe that further selling could remain subdued,” the bank says. In a weekly commodities report, Deutsche Bank lists forecasts of $1,600 an ounce for the second quarter, $1,800 for the third and $2,100 for the fourth.

Source:Kitco