Could China ride to gold’s rescue this week?
Gold GCJ3 -1.91% could get a break this week, maybe, in the form of China.That country is back from the Lunar New Year’s holiday and gold bugs will be scanning the horizons for signs of a pickup in physical buying demand and anything that could put a floor on recent gold selling. Getting lots of people nervous, gold dipped below that psychologically important support level of $1,600 an ounce on Friday.“What can and will probably make a dent in the recent downward direction is the opportunistical buying to take advantage of the sharp recent price decline,” says Frederic Panizzutti, senior vice president at MKS Finance Geneva. “All factors that led gold toward higher levels over the last 3 years are still intact and we would see no reason why the medium term trend would have changed.”

China is a key market for gold, one of the biggest global buyers in the physical sense, and will be again this year, said the World Gold Council recently. India, which overtook China last year, is also tapped to be a big buyer again this year, though its sluggishness has also been blamed for gold’s decline.
Ole Hansen, head of commodities strategy at Saxo Bank says futures prices out of Shanghai for gold on Monday showed near-high records on volumes. That could mean two things, he says: ”some looking-into the market on these levels,” or sign of long positions needing to be hedged.

Either way it rolls, investors will be watching…
http://blogs.marketwatch.com/thetell/2013/02/...this-week/