After a resurgence on the back of the US Feds talk of more quantitative easing measures, Gold dropped down during the first day’s trading of September, but many market players expect a strong month for the yellow metal.
"September has proved to be a bullish month for gold, with price rising during the month 21 years out of 30," Barclays Capital said in a note. "During the period that covers the great bull trend of recent years, those figures improve to nine out of 11 years."
"Frequently, during the rally, September was also the month that price rallied out of long-standing ranges, signaling the resumption of the secular trend," it added.
Spot gold stabilized below two-month highs overnight as investors booked profits and poured money back into equities on a surge in risk appetite following strong Chinese and US data.
But the pause was likely to be short-lived, with the uptrend of the past few weeks still very much in place ahead of the key US payrolls data due on Friday, analysts said.
Spot gold reached a fresh two-month high of $1,254.80 per ounce at one stage before settling back to its current $1246. Technically, some more consolidation may be on the cards before a possible move to challenge the June record high of $1,265.30.
"Gold remains a 'macro-play'," said Michael Widmer, analyst at Merrill Lynch/Bank of America. "In the past few weeks, gold really traded on a slowdown in growth, particularly in the US."
"Today the PMI was quite strong and investors decided to lock in some profits after the strong run in gold," he added. "But everything is still in place for gold - unemployment is still an issue in the US and Friday's payrolls data could be a key driver"
Risk currencies also benefited overnight – the NZD back up to 0.712 aided by the global dairy TWI rising by 17%. The kiwi is still expected to trade in the .7 to .72 range in the short term however.
DISCLAIMER: New Zealand Mint does not provide financial advice and does not employ financial advisors. Any opinions expressed within news articles are not intended as recommendations. If you are looking for investment advice, please seek independent, specific advice regarding your personal financial situation from a qualified professional.
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