Likely gold will test $2,000 in near-term – ABN AMRO
Georgette Boele, Currency and Precious Metals Strategist at ABN AMRO Group Economics, thinks the psychological level at $2,000 for gold is within reach after XAU/USD broke above the previous all-time high that was set at $1,921 on September 6, 2011.
Key quotes
"We recognise that the stars are still aligned for gold prices and therefore the momentum is very positive. But we are also concerned about positioning. Speculators temporary reduced positions, but other investors have continued buying."
"Speculative positions are substantial and positions in ETFs are at an all-time high. If investor sentiment deteriorates, some of these positions will likely be closed. This will cause higher volatility in gold prices. We still expect a sizeable correction in gold prices in a risk-off environment when the dollar is back in favour."
"It is likely that this correction will be short-lived and be a buy-on-dips for investors eagerly waiting to step in. After such a correction, prices could rally again. It is likely that gold prices will test USD 2,000 per ounce in the near-term. But we still expect some profit-taking after that."
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
