Gold at $2000 per ounce soon?
Precious metals carried the recent rally forward and have now moved higher on a daily basis this past week. This type of continuous increase has not been noted for gold and silver rates in a while. The market continues to buy gold as the importance of genuine diversification grows; this comes due to the risks presented by currency debasement and inflation. The sudden tumbles within the share trading markets assisted gold in the bullish move up; in addition to the on-going speculation regarding a potential economic depression in the states and European union.
Gold closer to $2k per ounce
An interesting development came from Dubai this week where the DMCC (Dubai Multi Commodities Centre) unveiled the UAE’s 1st ever gold bullion coin. The DMCC is in discussions together with the UAE Central Bank to look at designating the gold bullion coin as being the first legal tender in the UAE and the Middle East in its entirety. Gold demand from the middle eastern region remains firm and could potentially gain the momentum to move much higher yet.
The price of Gold improved by over 5% throughout the week, 14% this month.; additionally, the previous week’s average gold value climbed to an all-time high of over $1,800 an ounce – this was over 3% higher than the previous week’s average – Silver likewise rose by almost 8% this week.
From a technical perspective we are moving into new ground and therefore have no price structure resistance to speak of. However, $1,926 is a 261.8% Fibonacci projection level which should be monitored on any approach to $2000. My previous post on gold noted that “Technicals are still pointing to further gains in the near term”. I see no reason to change this bias at present but would expect to see interim period volatility, including profit taking drops on an intra-day basis to the downside, as the precious metal potentially continues on the longer term trend higher.
Update 24/7/11: Yesterday we identified a price action reversal signal on Gold.