An optimistic tone for the gold price we remarked on a week or so ago has been overtaken by a sharp downturn in the markets.
by Lawrence Williams
LONDON (Mineweb) – Perhaps we were a little premature a week or so ago in suggesting that the gold price was due for a strong upturn following a period of consolidation – see Consolidation over? Is gold at the turning point?. In a way the title was correct, except that the price turned downwards rather than upwards – and sharply so!
But even so we do feel that the future for the gold price is to continue rising overall. The latest downturn isn’t a case of a bubble bursting, but short term sentiment seems to have been moving against the precious metals and consequently buying pressure isn’t coming in to the same extent for now. The bears are tasting blood and weighing in with selling pressure and there could be other forces at work too. It may not take much to reverse the current weakness, but those who follow the charts (admittedly often finding interpretations at odds with one another) are mostly looking for further weakness before a serious recovery kicks in.