Developments over the past week in both China and India could have bearish implications for the price of gold, according to a recent report by TD Securities.
In a note to clients this morning, precious metals strategist Steve Scacalossi wrote that “After the Christmas weekend the precious metals complex drifted lower. Gold opened right on it’s day highs and never looked back with a deluge of sell orders towards $1,607. This is somewhat surprising given news yesterday out of China where the head of research for the Peoples Bank of China was quoted as saying that the country should buy more gold when prices are relatively low. Support for gold is at $1,575 and then major support at $1,500 as per today’s chart.”
The TD strategist added that “In other news, China has restricted gold spot and futures trading to the Shanghai Gold Exchange and Shanghai Futures Exchange as part of efforts to crack down on illegal buying and selling of commodities.”
As for India, Scacalossi noted that ““Indian gold demand may drop as much as 50% in December after a plunge in the reminbi drives up local prices. Imports may total 35-40 tons this month compared with 70-75 tons a year ago as per the Bombay Bullion Association.”
From a technical perspective, he contended that “Gold has broken short term support and is vulnerable to a test of 1560.”
West Kirkland Expands Gold Mineralization at TUG Property
The TUG property is part of 1,020 square kilometers (252,000 acres) of mineral rights in the Long Canyon Trend that the Company has optioned through a transaction with Fronteer Gold – prior to its acquisition by Newmont Mining – and with Rubicon Minerals. The combined Newmont and Rubicon option agreements give West Kirkland a dominant land position within the Long Canyon Trend and will be the focus of the Company’s exploration efforts in Nevada. Full West Kirkland Mining Press Release.
* This hole confirms the system is open for further expansion
* Northeast structures parallel to the Long Canyon Trend at the north end of the TUG deposit, beyond hole WT11-007, will be the target of drilling in January 2012