Although the macroeconomic environment is bullish for gold, Barclays analysts say physical demand remains the key ingredient to support the market. “India’s festival-related buying was below expectations, and demand across Asia is broadly offering prices a soft floor,” they say. “Although there is a ready buyer for net redemptions, demand is not strong enough to set a firm floor.” Commenting on this week’s Federal Reserve meeting, analysts still expect a September rate hike. The analysts also note $1,142 and $1,131 as key levels to look at in the gold market. “A move below the latter would confirm further downside traction towards our greater targets in the 1086/1094 area,” they say. However, relative to the other precious metals, like platinum and silver, analysts say they expect gold to outperform. Barclays’ price forecast for gold remains at $1,190/oz for the second quarter and $1,183/oz for the year.
