The correction since September has caused some market players to temper the Bullish view of Gold prices, LTN held the POV that any more Southside action would be temporary and the precious Yellow metal will make new highs in 2012.
The confluence of factors contributing to Gold's resumption of the up-trend, include; negative real interest rates, exceptionally low interest rates together with enhanced inflation expectation, mistrust of fiat (paper)currency and the slowed resolution in the sovereign debt crisis in the EuroZone.
That said, Shayne and I hold that the Gold price may rise just above the 2000 mark later this year, or in early 2013, even as some are saying that the Gold market may be nearing the closing of its long Bull run.
On the supply-demand balance in 1-H of Y 2012, mine production is expected to increase by +3.2% Y/Y to 1400 tons, offset by a -3.1% decline in old Gold scrap to 734 tons.
On the demand side, fabrication will be lowered by -3.4% in 1-H of Y 2012 as driven by a -3.1% decline in jewelry demand. Net official sector purchases would also be down by -7.3%. But, the official sector would remain a net buyer of the precious Yellow metal.
The POV that Gold's up-trend will be resumed after the correction is in line with our forecast. As I mentioned in the weekly technical outlook, Gold's price actions from 1923.7 high are viewed as a medium term consolidation pattern only.
Long Term Picture: with 1478.3, the Key support, intact, there is no change in the long term Bullish outlook in Gold. Some more medium term consolidation cannot be ruled out, I anticipate an eventual break of 2000, the psych mark, in the long run. Stay tuned...
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels. www.livetradingnews.com