Gold Train 'Still on Track'

Source:

Jeffrey Nichols, managing director at American Precious Metals Advisors, says seasonal factors like demand from Asia will soon turn positive and long-term price prospects “remain as bright as ever.”

With gold recently trading below US$800 per ounce on continued strength for the greenback, the bullion bulls are making it clear how undersold they think the metal is. Nonetheless, some admit that gold remains vulnerable and prices need to be sustained above US$800 for a few days for the technical situation to improve. Then it can try to rebuild support at key levels between US$800 and US$900.

Meanwhile, committed buyers also need to return before we’ll see a sustainable advance, according to Jeffrey Nichols, managing director at American Precious Metals Advisors. He points to the impact of the credit crunch, which has reduced liquidity available to precious metals traders and speculators as the source of volatility in both directions.

But the economist says seasonal factors like demand from Asia will soon turn positive and long-term price prospects “remain as bright as ever.”“The schedule may have been set back a few months, but the train is still on track,” Mr. Nichols said, reiterating his forecast that gold will climb above US$1000 per ounce either later in 2008 or early in 2009...

Related Articles

Get Our Streetwise Reports Newsletter Free

A valid email address is required to subscribe