Christmas and Chinese New Year Makes December a Good Month for Gold

By: GoldCore

Gold reached a new nominal high overnight of $1,226/oz. Gold is currently trading at $1,218.40/oz and in euro and sterling terms, gold is trading at €807/oz and £732/oz respectively.

Gold may be overbought in the short term but in bull markets with strong fundamentals, markets can remain overbought for long periods of time as was seen in the 1970s. There are many institutional and central bank buyers on the sidelines at these prices but they will provide strong support with many waiting to buy on the dips. The recent sanguine reaction of markets to the Dubai default and buoyancy in equity markets has led to leveraged players returning to the futures market and this in conjunction with the strong physical demand from more risk averse investors and central banks means that there will likely be more diversification into gold in 2010.

December is seasonally a strong month for gold with jewellery demand for Christmas and then the increasingly important Chinese New Year demand and this means that any price correction is likely to be reasonably shallow. However, volatility may likely increase and a pullback of some 10% is quite possible.

Silver
Silver went as high as $19.38/oz overnight but it has experienced a slight pullback this morning. Silver is currently trading at $19.22/oz, €12.72/oz and £11.53/oz.

Platinum Group Metals
Platinum is trading at $1,502/oz and palladium is currently trading at $394/oz. While rhodium is at $2,625/oz.

This update can be found on the GoldCore blog here.

The Bullion Services Team

WINNERS MoneyMate and Investor Magazine Financial Analysts 2006

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