Slight economic improvements have had positive echoes in the markets lately. It has created a “risk on” trade within the marketplace, where demand for Treasurys lingers and the dollar weakens. This has supported commodities, gold especially.
Many traders view the recent selloff as being a bit of an overreaction, with the weakening euro being a primary factor contributing to that sellof.
The most recent slump in gold prices has likely occurred because the dollar is slowly repositioning itself as the safe-haven of choice “because of the need for liquidity.”
As the conditions in Europe continue to improve, there’s a strong chance we’ll experience an upside with gold.
Meanwhile, market sentiments along the way are predicted to be wobbly…rapidly shifting back and forth throughout the next few months…
Gold for February delivery dipped down to $1,616.80 per ounce on the Comex in New York this morning – dropping by 80 cents an ounce.
The good news is that gold is more more expensive to buy with currencies other than the U.S. dollar. In Asia, gold broke above its 200-day moving average, right around $1,620 per ounce.
In order to restore gold traders’ confidence in an up-trend, gold needs to close above that level.
For the remainder of 2011, an unstable euro and the strenghtening dollar could “provide short-term headwinds for gold.”
But, fear not. The year is drawing to a close and the 2012 outlook remains optimistic for all you gold investors.
Brittany Stepniak – Wednesday, December 21st, 2011
David Williams, director at Strategic Gold Corp., has an insider perspective on where gold will go in the coming year. According to his careful observation of the market trends and economic data, gold is likely to climb all the way to $3,000 or higher in less than six months’ time.