Gold Price Consolidating - Analysts See More Gains Ahead

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Reuters quotes Adrian Koh, an analyst at Philip Futures in Singapore, as feeling that there is potential upside resistance at $935-940, after which little would stop the metal moving into the $950s and perhaps beyond while David Thurtell at BNP Paribas reckons that if gold can hang on above the $915 level, it could easily push back to $950 - and then over $1,000 again in Q3.

The past ten days have seen what could be yet another sea change in the progress of the gold price with a steady rise from the $860s up to over $930 before falling back a little and consolidating in the $920-$930 range where there seems to be a level of downside resistance.

The strong gold proponents feel that this is yet another plateau from which the price will move onwards and upwards back to the $1,000 level and way beyond, but many of the more cautious analysts also seem to be predicting strength at current levels - and a $1,000 gold price again later this year - but with the rise at a slightly slower pace perhaps picking up momentum in the third quarter when prices are traditionally a little stronger.

Reuters quotes Adrian Koh, an analyst at Philip Futures in Singapore, as feeling that there is potential upside resistance at $935-940, after which little would stop the metal moving into the $950s and perhaps beyond while David Thurtell at BNP Paribas reckons that if gold can hang on above the $915 level, it could easily push back to $950 - and then over $1,000 again in Q3.

But beware the dollar. There are very mixed views on where the dollar lies at the moment in terms of strength against other currencies. The big fall back to the $850s and below occurred at a time of relative dollar strength when some indicators suggested that the US economy was not as weak as many had been predicting, and the upward surge of the past ten days occurred as the oil price hit record highs - like gold, oil price strength is also a sign of dollar weakness, although there is perhaps more of a supply/demand balance element here - and the dollar falling back again.

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