Gold prices reclaimed the USD $1200 price level Friday even as US GDP was revised higher. With sentiment weakened further by the 'surprise' QE taper last week, many were expecting the June low of USD $1180 to fall, but so far it's held firm. Despite this, we wouldn't rule out a break below USD $1180 in the next few days between now and the New Year, especially with volumes expected to be light. Whilst gold will end the year down over 25% (in USD terms), and whilst bulls are licking their wounds, they'll be encouraged by developments on the physical side of the market. Physical demand shows no signs of abating, with the latest estimates suggesting Chinese gold demand has now reached 2,000 tonnes for the year, roughly equal to an entire year's worth of global gold production excluding China (which doesn't export a single ounce). That's some 'end' to a bull market
I do agree that physical demand for gold is not showing any signs of waning. Hong Kong's Chow Tai Foong Jewelery is an example of the physical demand for gold likely to come from China.
Core PCE could be interesting tonight, given strong number (say 1.3% or above) should push 10-yr to 3%..increasing positive real yields and pushing gold down..don't think PCE will get that high as never usually misses consensus by much, and trend is actually lower...but never say never I guess
could be right mate - disinflation trend this year and rising yields definitely been a drag on gold prices. Think the Fed will be watching that 3% line pretty closely, i don't think the US economy healthy enough to sustain much higher rates just now