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Why Gold Could Remain Range-Bound
09 Apr 2012 EDT - CNBC.com
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“Two factors that we need to watch are physical demand and ETF demand,” says Cooper. The “end of the strike (in India) should provide support for prices” she says. A three week old strike by jewelers in India ended Friday as government officials said they would “consider” revoking an increased levy on gold imports.

Weakness in physical demand from India and also, China is one of the fundamental reasons Cooper had cited in making the “bear” case for gold. Reports say that the strike in India could resume on May 11, if the tax is not revoked. “One that we need to keep an eye on,” says Cooper.

As for ETF demand, the most recent data for fund flows is flashing “neutral” with a warning to the downside.

Cooper writes:

“Flows for April have been lackluster with a modest net outflow of less than a tonne. Should the longer-term sticky investor interest turn vastly negative, gold prices would be susceptible to deeper corrections.”

With price resistance at $1690 per troy ounce and investor support at the $1600 level, including demand from China, Cooper says that she will not get back in until there is a clear sign that the bull trend has resumed.

“Unless one of those catalyst changes, we should remain stable,” says Cooper.

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