Gold flirted with an 11-month high early Friday, only to retreat after a strikingly positive jobs report. With gold up over 12% over the past three months, investor focus is returning to the shiny metal. Below are four reasons gold could break through the psychological $1800/oz. barrier this week. Words: 347
So says Plan B Economics (www.planbeconomics.com) in edited excerpts from the original post* on Seeking Alpha entitled 4 Reasons Gold May Break Through $1800 Next Week.
Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.
The post goes on to say, in part:
1. Trader bullishness is rising:
- According to an October 5 Bloomberg survey, traders are the most bullish in three weeks. 20 of 32 traders participating in the survey expect gold prices to rise next week.
- A similar Kitco survey shows 78% of traders are bullish on gold for next week.
- Also, U.S. Commodity Futures Trading Commission data show that hedge fund bets on gold are the most bullish in seven months.
- In the retail physical market, Bloomberg also reports that coin sales hit a nine-month high.
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2. Chinese traders returning from Golden Week holiday:
- Chinese traders — often a large source of demand for the metal — took last week off to shop and travel (a.k.a. get stuck in miles-long traffic jams). With Chinese traders returning to work, fuel may be added to the gold fire driving the recent rally further.
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3. Spain may be close to requesting a bailout:
- Late last week, Spanish bond yields rallied as market participants anticipated a bailout request. Spain has been holding out, but may be approaching the point of no return, as budgets are stretched by an imploding economy and political power is threatened by growing social upheaval…
- Spain’s request for aid would open the floodgates for even more ECB monetary easing. This would be positive for gold, and a Spanish bailout request could be made as early as next week.
4. Positive momentum:
- Momentum begets momentum. Regardless of how little sense this makes (in my humble opinion), it is often a truism in the world of trading. Gold’s recent positive momentum is already attracting investor attention, as seen in the various trader sentiment surveys mentioned above. Compound this with the returning Chinese traders, and current gold momentum could have support.
The above four factors, especially when combined, could help drive gold prices through the $1800/oz. barrier over the next week.
*Source of original article: http://seekingalpha.com/article/909561-4-reasons-gold-may-break-through-1800-next-week
Editor’s Note: The above post may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.
An objective and reasonable estimate for the price of gold at the next intermediate peak (estimating 2013 – Quarter 2) is $2250 to $2550 per ounce… This is not a prediction based on wishful thinking and hope, but a best estimate based on rational analysis of data back to 1975. The actual price for gold at its next peak could be higher or lower, and the peak might be earlier or later, but this price range and approximate time is, by this analysis, the most probable. Words: 1682
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The interim peaks in gold have been spaced 21 months apart over the past 6 years and have seen gains from 80.2% to 97.3%. As such, given the fact that the low of this last correction came in at $1,524 four months ago, we can expect gold to reach a new peak price of $2,750 to $3,000 in 17 months time (i.e. June/July 2013). [Let me explain in more detail.] Words: 976
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