Patterns in gold price puzzling - Insightful!Submitted by Charleston Voice on Wed, 05/02/2012 - 18:26
Patterns in gold price puzzling - Insightful!
- but understandable
The yellow metal seems increasingly resilient in the face of poor current fundamentals and strange downward price spikes from which it has recovered rapidly?
Author: Lawrence Williams
Posted: Wednesday , 02 May 2012
LONDON (Mineweb) -
Are we seeing some interesting resilience in the gold price? Despite reported continuing subdued demand from the Indian subcontinent - one of the major drivers in physical gold consumption - and yet another strange trade on COMEX on Monday which knocked the yellow metal back $14-$15 in a single minute, gold rapidly regained its poise that day and after a flat start yesterday did, at one time, breach the $1670 level, although not for long.
Of late gold has shown some interesting contrarian tendencies. When every analyst and his/her dog were predicting huge new highs in late August last year, gold repaid their optimism by crashing back a few hundred dollars between then and the year end. Again when prices started to build at the beginning of the current year and almost as soon as optimistic forecasts were again beginning to predominate, gold crashed back again - not quite as far as in September last year - but significantly so.
More recently the less bullish consensus has been taking a hold. Talk of an improvement in the U.S. economy (which may well not in reality be there), the continuing Eurozone sovereign debt problems which, at least in theory, should mean some dollar strength against the Euro, a so far small downturn in the Chinese economy - all these seem to have been reasoning behind downgrading of forecasts from the mainstream (conservative) analysts, although most do at least give lip service to a small price increase over 2012 and possibly 2013, but beyond that some see doom and gloom for gold miners as prices fall back and costs rise inexorably...Read more>>Patterns in gold price puzzling - Insightful!