Quotes from Commerzbank Corporates & Markets:
-Gold is trading largely unchanged at around $1,230 per troy ounce as the new week gets underway after having rallied slightly on Friday. According to the CFTC's data on the positioning of speculative market participants, this group of investors slashed their net long positions in gold by 20% or 28,800 to 119,500 contracts in the week to 10 February. Thus speculative financial investors played a major part in the price slide which was triggered by robust US labour market data during the corresponding reporting week.
-At the same time, however, it shows that the previous price surge had been driven to a considerable extent by speculation. The gold ETFs tracked by Bloomberg saw further outflows of 3.2 tons on Friday; these were attributable to the world's largest gold ETF, the SPDR Gold Trust. This was also the fourth daily outflow in a row. Nonetheless, we expect to see the gold price stabilize because we believe that the ongoing risks still suggest solid demand for gold.
-Although the ceasefire agreed in Ukraine largely appears to be holding, it seems doubtful whether this means the crisis has been lastingly resolved. Market participants will be focusing their attention once again on Brussels today, where the Eurogroup will be conducting renewed negotiations over Greece. If no last-minute deal is agreed between Greece and its creditors, this would bring the country a big step closer to insolvency and doubtless lend support to the gold price.
