Technicals | May 13 2010
By Rudi Filapek-Vandyck
Gold. Gold. Gold. The global investment community is reliving the flashback of October-November last year. Financial commentators are back to mentioning gold every five minutes or so and investors have again started ignoring, if not abandoning, industrial metals and crude oil in favour of gold and other precious metals.
Yet, some precious metals specialists are already sounding the alarm bells. If you haven't been part of the crowd, this may not be the ideal time to join it. Remember December last year? Overall market sentiment is once again looking too biased in favour of the bulls.
Standard Chartered is suggesting a pull back looks far more likely than ongoing gains.
Over at Barclays, a schism seems to have opened up between the fundamentals desk (unquestionably bullish) and the team of technical market analysts who suggest minor gains can still be expected, but US$1300/oz looks like the terminus for this ascent – at least for now.
Other experts continue mentioning US$1350/oz as the next station for gold, which seems predominantly based upon technical analysis. Among these experts is the house-chartist at Thomson-Reuters.
For good measure: the technical experts at Barclays remain firm believers that gold is ultimately on its way to US$1500/oz, it's just that it won't happen in one straight line. They do predict it will happen later this year, though.
Their preference is for silver, which is expected to outperform its bigger brother.