Gold Outlook 2006

Discussion in 'Metals' started by Pradeep Unni, Jan 19, 2006.

  1. Pradeep Unni

    Pradeep Unni New Member

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    The latest rally in gold's five-year bull-run may run out of steam once the metal approaches US$570 an ounce. With the spot price reaching US$564.40, its highest since early 1980.

    With Tuesday's (17th jan2006) gains, the price of gold has risen 15%, or US$74, in less than a month as investors seek to hedge against a weakening U.S dollar, inflation concerns built around high energy prices and emerging financial imbalances in general.

    Adding fuel to the current steep run-up are growing concerns over Iran's nuclear ambitions and possible bird flu pandemic given gold's traditional safe haven status. All this has been happening at a time when commodities are evolving into a mainstream asset class amid rumors that several central banks are buying bullion to diversify foreign reserves. There have also been concerns that the U.S Federal Reserve won't raise interest rates as much as previously thought, making the U.S dollar a less attractive investment option. Other precious metals have also soared to cyclical highs on gold's coattails, with silver hitting an 18-year high US$9.30 this week. Platinum is in all-time high overnight of US$1,051.50. While there is little sign of a change in the investment climate supporting precious metals, some analysts warn the dizzying trajectory of gold's recent run-up and its chart patterns suggest the market is approaching a short-term peak. Resistance Likely Around $565-$570/Oz.
    The fundamental arguments are still quite persuasive for gold but from a technical point of view, as we get up toward US$565-570, we might see a situation where the market pauses for breath.

    BUT thats not that easy.There are more BULLS in the market than BEARS. Gold's ability to puncture the major Fibonacci retracement at US$562.75 on Comex is a positive sign and means gold will probably test the monthly channel resistance line near US$569

    A break of US$569 could spark rapid gains toward the former major pivot area of US$600-612, but more likely would see a few months of consolidation above the former monthly channel resistance line at US$503.80. The strategy should be to buy the dips when those corrections occur.

    STRATEGY: International gold: Buy Gold at 547 levels, with a stop loss of 532 and targeting $570 / oz
    : MCX gold BUY (FEB06) at 7885 levels, with a target of 8030


    Pradeep Unni
    9867 422279
     
  2. vinayvpl

    vinayvpl New Member

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    Dear Pradeep,
    The article is really comprhehensive and fact filled.

    However, i just have come across a fact that is common in aritcles on gold outlook recently that is every one is racking the buyers,buying quantum,reasons for the bulilsh outlook of goldetc..,

    But where is supply data, i mean to say where can i get data by what quantity johannesburg(SA) gold producers or australian gold producers are intending to raise their production in response to bullish outlook on gold, or when are the bullion houses of US,UK are intending to book their profits at or what are the dubai and indian gold stockers saying and are these going to have any impact on gold prices.:confused:

    And in the light of these things will the gold really see the heights($1000 as some survey on a US site is popping) its predicted to see.

    please take time to reply to this small query of mine
    regards
    vinay
     
  3. bullionbears

    bullionbears New Member

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    hi pradeepunni,

    its really superb that u gave an elaborate trend on gold. fine but now gold has reached another histoic high of 575$ in the futures april contract. as my point of view gold could consolidate around $544 if it closes down at this level further it will fell upto $525.am i rightr Mr. pradeep unni
     
  4. superkap

    superkap New Member

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    Hi, please read the article posted by Saint elsewhere in this forum:
    http://www.zealllc.com/2005/gorex2.htm

    The historic high has been in 1980 when gold went above $1600, and stayed above $600 for nearly a decade thereafter. Seniors, please correct me if I am wrong or off.

    I am quoting from Business Line article today: "at every dip in price there is evidence of buying interest. No wonder, the market looks well supported at around $545/oz and is largely seen as consolidating."
     
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