The increase of gold prices by 4.98 percent last week was mostly triggered by investors who covered their short positions, said Gerhard Schubert, head of commodities at bank Emirates NBD, on Saturday.
The gold prices rise by $61 to $1,285 was no signal for a reversal at all, said Schubert, "as the price action seen can easily be described as a short covering rally in a bear market environment." Regarding interest in physical gold buying, Schubert said in his weekly commentary on precious metals that it had still been strong, especially in the early days of last week, "with interest waning in the wake of the rising prices."
However, the outflow from exchange traded funds (ETF) with gold as an underlying continued at stop-watch speed. According to British firm ETF Securities, investors pulled some $18.5 billion out of gold ETFs in the second quarter alone.
Chinese imports are still going strong but the turnover of the Shanghai Gold and Futures Exchange plummeted at the end of last week, said Emirates NBD's Schubert.
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