Limited additional downside potential for Gold


NEW YORK (Scrap Register): Treasury yields, with technical-chart selling accelerating the move. Commerzbank expects only limited additional downside potential for gold.

Speculators in the futures market have already trimmed their net-bullish positioning since summer, so this form of selling pressure should abate, the bank added.

Meanwhile, the low price level should stimulate physical buying interest. The geopolitical tensions in the Middle East (violent protests in Gaza, uncertainty over the Iranian nuclear agreement) point to solid demand for gold as a safe haven, as does the Korea conflict that is flaring up again, Commerzbank added.

North Korea canceled a high-level summit with South Korea and there is now uncertainty on whether a planned summit between the leaders of the U.S. and North Korea next month will occur.

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