Gold Eases Back But Storm Clouds Remain

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...Perhaps the one warning sign for gold is that it is a long way above its 200 day moving average, which could yet suggest a fall back on benign news in the coming months. But we doubt that such a move would be long-lived...

After the coincidence of factors, which all served to push gold up to its new record level immediately after the New Year, the yellow metal took a turn down at the end of the week and over the weekend as some of the worries fell out of general news coverage and other factors affecting the price eased, although probably temporarily...

Perhaps the one warning sign for gold is that it is a long way above its 200 day moving average, which could yet suggest a fall back on benign news in the coming months. But we doubt that such a move would be long-lived and there seems to be more chance of stormy weather ahead on the geopolitical and financial fronts which will reinforce the metal's safe haven status, and along with the declining dollar should keep the overall upward path intact.

Most conservative gold forecasters are now predicting $1,000 gold this year, or next. The price pattern has been one of accelerating increases year on year for the past few years and if this trend continues then even higher price levels could be seen this year, but if the currently global factors boosting the price are mitigated even a little we could be in for a less volatile year.

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