Spot market gold bullion prices hovered close to $1,725 an ounce during this morning's London trading, holding gains made overnight in Asia, as stocks and commodities also recovered some ground lost last week.
The new trading week started with small losses in the precious metals complex despite a 0.14% drop in the US dollar and a near-$1 advance in crude oil. Small-scale profit-taking was cited after gold market players attempted a test at the $1,680 resistance area.
To paraphrase the great Steve Martin, today’s investors are very passionate people and passionate people tend to overreact at times. An overreaction is exactly what’s happened in gold and global markets in recent weeks.
Gold’s been knocked down lately, but several enduring factors have conditioned the yellow metal for a comeback. The yellow metal will go the distance, and with bullion below its long-term average, it makes for a rare and attractive entry point for investors today.
The gold price crept higher early Friday, recovering half of this week's 5% loss to near six-month lows as the euro currency rallied from 12-month lows and world stock markets held flat. The last London gold fix of 2011 came in at $1,574.50 per ounce.
Bullish factors weighted against bearish factors suggest that gold will continue higher with the highest probabilities being that the yellow metal will likely end this year around $1,600/oz to $1,610/oz and possibly next year over $1,800/oz.
This volatility also brings along opportunity. We believe we're only halfway through a 20-year bull cycle for commodities and investors can use these pullbacks as an opportunity to "back up the truck" and load up for the long-haul.
The editor of the Resource Opportunities newsletter and expert on mining investments explains why he loves the prospect generator model and why now is the perfect time to snub bullion and cozy up to mining equities.
The Clarus Securities analyst believes several gold juniors operating in West Africa are prime takeover targets and expects merger and acquisition (M&A) activity to heat up as the major gold producers seek to replenish their project pipelines.