We believe the strength of the physical market is vitally important for 2006; even though gold is rising on speculative and investment buying, at some point there will be a reversal of this trend and gold will correct. |
We do not believe that this correction is over and suspect that gold will now consolidate between recent extremes of $545 and $568, with a break of $575 needed to bring back bullish sentiment. |
We expect that funds held 17-18 million ounces of gross long positions as of Tuesday. If the net long position is more than this then we will become even more bearish; only a release that shows that the net long positions declined from the 15 million ounces reported last week would make us positive about the short-term outlook for gold. |
We had a period of needed consolidation in gold ... with rallying base metals, strong silver prices and improving momentum, we can probably go higher. |
We had a very good run. You have a pullback and correction at some stage and we are in a process to do that at the moment. |
We need to find the level at which underlying physical demand will support gold. Until then, I wouldn't be comfortable with gold up here, because it's all investment and speculative money at the moment. |
We recognize that prices are above what is justifiable on the basis of supply and demand fundamentals. |
We suspect that technical buying of gold and silver on COMEX (New York) will be triggered by a positive announcement of the silver ETF. |