Gold Well Supported with Sound Fundamentals

Source:

"Despite these peculiar sell offs, gold remains well supported at $865/oz…"

Gold and silver rose Wednesday (the first day in three) after the worse than expected U.S. GDP report saw the dollar fall in value. Gold fell after the Federal Reserve released its optimistic note but recovered almost immediately.

Gold subsequently traded sideways in Asia and early trading in Europe prior to another bout of furious selling just after 1000 GMT Thursday morning, which again saw gold fall a very sharp $10 in a matter of minutes despite the lack of any market or economic news of great significance. Despite these peculiar sell offs, gold remains well supported at $865/oz and the technicals and the fundamentals remain sound.

The WHO warning of an "imminent" worldwide swine flu pandemic is being greeted somewhat complacently by the markets and risk appetite remains strong. This could change very quickly as markets realize the likely dire economic implications of a swine flu pandemic on an already fragile global economy.

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