Gold bulls undeterred as stimulus-led rally fades

Source: World Gold Council

Gold bulls believe there is still enough momentum in the market to push the precious metal’s price above $1,400 in the near term – in spite of speculation that the U.S. Federal Reserve may start reducing asset purchases in October.

Just under two-thirds of the respondents in CNBC’s poll of gold market sentiment (62.5 percent, or 10 out of 16) believe prices will gain this week. A quarter, or 4 out of 16, say prices will extend Friday’s over 2 percent decline, while two respondents believe prices may trade around current levels.

“The latest euphoria in gold could continue in the coming days as speculative investors liquidate their short positions in futures and options further,” said UBS analysts Dominic Schnider and Giovanni Staunovo. “A test of the upper bound of our three-month trading range of $1,425 cannot be ruled out, especially with the Chinese market returning this Monday from a long weekend and the U.S. debt-ceiling debate coming into focus.”

Read more at CNBC

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