Gold trading in a broader range of $1,312 -$1,327 as both sides are loath to engage in a large position in the midst of the debt ceiling talks. A break of $1,307 portends a test of $1,292 and the upper band breach suggests $1,355. I am preparing to leave New York where I participated in a precious metals panel, which was preceded with a key note address from Nouriel Roubini. To his credit, he continues to maintain his gold target of $1,000 by the end of 2014, citing financial ‘event” risks have greatly mitigated and predicting that rates will continue to rise albeit slowly in 2014. The low rate environment with modest steeping of the yield curve will, in his opinion, continue to be positive for equities. On the other side of the argument, the camp argued that monetary policy over the past few years will lead to serious inflation issues and a debasement of the US$ and anticipate gold to trade at $1,500 or higher by year end 2014. I consider it plausible that both sides may be right, however I have more reservations on the bullish case, at least from a timing perspective. I see the inflation/dollar argument more a focus further out. In the interim, a “managed” percentage of gold in your portfolio continues to be warranted and trading breaks will continue to offer traders excellent profit opportunities. Be it bear or bull the markets will be a swinging event.
Posted on: Tue, 24 Sep 2013 19:06:17 +0000
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