Market Nuggets: Barclays: Gold Market In Search of Support From Physical Demand

(Kitco News) - The gold market is searching for support from physical demand, which has been “fickle” lately, say analysts with Barclays Capital. Market watchers will be looking to see whether such demand, particularly from the Far East, picks up after a recent price decline pushed gold below its 200-day moving average as the probability for further quantitative easing in the U.S. declined. “Investment demand has been in the driving seat but amid exposure being scaled back, gold has been searching for a floor from the physical market,” Barclays says. “Such demand has proved to be fickle in recent weeks with only sharp price corrections triggering temporary interest. Volume traded on the Shanghai Gold Exchange firmed yesterday but is still below early-January levels, while local gold prices in (Indian) rupee terms have not fallen as far thus not triggered a significant response.” Barclays says holdings by exchange-traded products were mostly unchanged Wednesday but remain close to record highs, which bodes well for prices for now.