Golds initial plunge this year was due to crowded and complacent positioning and this extreme overbought condition is why the precious metal remains well below its January high. While we believe the washout in gold & silver is largely behind us, they will be driven largely by bond yields in the coming months, i.e. when oil prices retreat gold should rise – not the case this morning with gold down ~US$46 @ $US4784 (8.25am Sydney time).
- We can see gold trading above $US5,000 in the coming year.
MM is cautiously bullish towards gold ~$US4,800
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