Many of us are watching Gold's rally. Many are saying it is a craze and is running out of momentum, it is not IMO, as most of you know I cover Gold twice a week in my Gold, Silver and Crude Oil report at www.livetradingnews.com and the overall Technicals are supported by the Fundamentals and vis-a-versa
Many analysts including me are looking for the Gold price to reach 2000 oz,, the psychological mark, before we even need to think about it slowing down. That's at least another 10%+ upside, but in the Big Picture my work shows that Gold can go much higher and approach 2500 oz.
Gold strengthened today on various uncertainties that are darkening the World's economic outlook. The news reported that former Libyan leader Gaddafi sold 29 tons, about 20% of Libya's Gold reserves. That sale amounted to US$1.7-B in the beginning in April.
That news might have affected the market but the impact was small. Central banks in emerging economies remain loyal to the precious Yellow metal.
In central Asia, Kazakhstan's central bank said earlier last week that it would be buying up the Country's total Gold output from January 1, 2012 into at least 2015 in an attempt to diversify its exposure to the USD
This kind of action is not cheap USD driven, as central banks along with a few hundred million investors are looking to own more and more Gold as continuing bad news in the EuroZone and the US economy are making gold the safe-haven against fiat currencies. The demand for Gold is firm and real.
That said there is a revival in the interest for Gold miners, and especially in junior gold miners.
Most of the time, Gold mining stocks tend to move with the Gold price. But in Y 2011 it has been a great year for Gold, but not so great for the miners until now. The major mining stocks have broken out within the past month, and the junior miners have broken out this week.
For that reason I believe that savvy players will fare better by tapping into the junior Gold sector of the Gold market because it is not extended but undervalued in here.
Paul A. Ebeling, Jnr.