Gold price outlook

The gold price has shown some strength of late - rising $27/oz and $15/oz in the last two days respectively. It is questionable whether gold will break its previous resistance at this point. I am inclined to think that it will not, and that the gold price will once again settle back. These rallies of course make great opportunities to trade. Our view is that the support for gold is the $750/oz mark, though I see nothing which is likely to push gold that low, except perhaps a recognition that the economy is too hot, and the Fed needs to raise interest rates. This will likely occur within the next year. Of course it will never raise rates by the amounts required to rein in inflation; at least not until the dying moments when it has no choice. By this point, based on the following chart, we are expecting gold to reach a level of at least $US2200/oz. Of course this is an evolving story.
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Andrew Sheldon www.sheldonthinks.com