A scan of the opinions from a broad spectrum of analysts suggests two outcomes for the gold price, a drop to $1,500 or a rise to $2,000, the question is, which way will it go and what will be the main force behind the move?
Author: Julian Phillips
Posted: Friday , 02 Sep 2011
JOHANNESBURG -
For the last week and more gold has been on a roller coaster moving between $100 and $200 each way until now where it is hovering above $1,800. A broad spectrum of analysts points either to $1,500 or above $2,000. With gold currently just above $1,800 we are around the half-way point for each move. The move each way would represent a move of just over 16%, which is not deeply significant in today's gold world except for the trading fraternity; there is more, however, beneath these moves than meets the eye!
$1500 Implications
- The fall to $1,500 is only 16%+and would therefore not represent a change of trend to us.
- Should the price only fall to $1,650 it would be a correction caused by significant selling in the face of rising seasonal demand.
- A fall to $1,750 would be large buyers standing back and shaking out weak holders, who are, primarily, holding gold in the U.S. based SPDR gold ETF. They sold 50 tonnes last week.
U.S. Involvement in the Gold Market
The holders that sold gold from that ETF could be one of two types. Either a holder who took advantage of the sudden jump over $1,910 sold into strength heavily, as part of an ongoing sales program, or a broad spectrum of U.S. sellers, believing that neither inflation nor deflation is a future danger for the U.S. ......
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