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mineweb.com / By Lawrence Williams / July 4, 2012
LONDON (MINEWEB) -
This is now the third time in the past two months that the gold price has made a significant breakout above $1600 and the fourth time silver has made it back above $28- will it be third time lucky for gold and these levels held this time with gold in particular then poised for another relatively strong northern summer trading period – perhaps regaining $1700 and higher?
It is probably a fool’s game to try and predict short term movement in precious metals prices – particularly in the much more volatile silver sector where the small market size makes it particularly prone to manipulation by vested interests up or down. But with gold there does certainly seem to be resistance to downside falls below $1550 and an underlying propensity to reach higher levels again. It is notable, for example, how well investment in the top SPDR gold ETF has held up through a disappointing period for the yellow metal which is a strong indication that the big North American money is looking more and more for a rise in price in the months ahead. Indeed investment also appears to have been pouring in to some of the other significant gold ETFs too, notably in Europe, as those increasingly worried about the European financial sector move their capital into traditional safe havens.
Arguably the only thing which seems to have kept the gold and silver markets depressed is the apparent underlying strength of the US dollar which, for the past few months at least has appeared to be the ultimate safe haven investment. With gold – and other commodities – priced in dollars, dollar strength can be viewed as weakness in the metal price, even though price levels may be maintained in other currencies.
