New Record High for Gold; Is it Too Good to be True?

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...A correction in price would be a welcome development of the overall stability of the market, as the majority of the buying has come from the professional sector.

...There is a degree of euphoria among some of the market observations, certainly in the lay press and this is often something of a warning signal. While there is little doubt that all the conditions remain in place for a further increase in the price of gold in the medium term, the latest move has developed in relatively thin market conditions and the market is looking overbought. Physical demand is waning and there is plentiful stream of scrap supply coming through in India.A correction in price would be a welcome development of the overall stability of the market, as the majority of the buying has come from the professional sector. The physical market is, for the longer term, a strong one, but the recent volatility in price will certainly deter buyers for a while yet.

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