Further Upside In Sight For Precious Metals
Source: Mineweb (2/12/07)
Most of the key drivers behind the bull market for gold (and for the other precious metals) remain in place. This suggests that the downside is limited and any correction may offer a buying opportunity. Certainly recent trading behaviour in the gold market reinforces this point.
We also expect the supply side to provide some support. We do not expect to see any great surge in gold scrap supply unless prices exceed $700 per oz. The growing acceptance of a higher gold price appears to have constrained the increase to secondary supply. Any gains from mine output should also be more than matched by the likely fall in official sector sales, as CBGA disposals should stay well under quota and small scale purchases elsewhere could continue.