(October 5 – 12:05 ET) – Where
will the gold rally end? The short
answer is that no one knows. According to analysts at
RBC Dominion Securities Inc.,
“The gold market is continuing to
experience the mother of all
rallies.”
It’s climbed about US$85
in the last couple of weeks.
Clearly the announcement that the
15 major central banks would limit
their gold sales over the next
five years has been the catalyst
for this rally, but the big
question is whether anyone
actually likes gold or metals
traders are merely unwinding
massive global short positions.
RBCDS says the TSE Gold &
Precious Minerals Index, which
hit a year-to-date high of 7333
last week, faces important
resistance between its fourth
quarter 1998 high of 7532 and
its April 1998 high of 7951.
As for gold itself the analysts
are saying, “No one really knows
where the gold market will settle
down as the price action and option
volatility levels suggest further
choppy trading days ahead. Lack of
selling by producers has
contributed to this rally as
much as anything. Sentiment has
obviously shifted and the market
will now buy on any retracement.”
RBCDS analysts note that the
base metals – aluminum, copper,
nickel and zinc are still suffering
downward momentum and are in
early “correction” phases.
-IE Staff
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