Gold is back to below $1,600 an ounce, so about 15% from the peak, and yet, it seems like bullishness has not abated much, quite the opposite:
Gold traders are more bullish as investors buy metal at the fastest pace in a year to protect their wealth from Europe’s escalating debt crisis.Gold survey results: Bullish: 18 Bearish: 2 Hold: 6
Eighteen of 26 surveyed by Bloomberg expect the metal to advance next week, the highest proportion since Nov. 11. Holdings in exchange-traded products backed by gold rose 108.5 metric tons to a record from the start of October, the most since the second quarter of 2010, data compiled by Bloomberg show. The extra bullion is valued at $5.99 billion.
Investors are now making a $130.2 billion bet on gold as European leaders meet in Brussels to seek ways to tackle the crisis that means Germany and France are under threat of losing their AAA rating from Standard & Poor’s. The European Central Bank yesterday cut interest rates for a second consecutive month to shore up growth, increasing the appeal of gold, which earns investors returns through price gains.
What about Strategists:
- Citigroup: Citi Predicts Gold At $3400 In "The Next Two Years", Potential For Move As High As $6000
- Goldman: $1,810/oz
- Barclays $2,000/oz
- UBS $2,050/oz
Source for the latter 3: ZeroHedge
Even Mish, one of the lead deflationists, is bullish on Gold, with, what I believe to be, a wrong link between credit stress and gold prices...
Sentiment seems to be way too lopsided to allow for any gain in gold to be sustainable, and after what looks like an eleventh year of gan for the king of metals and the one and true money, 2011 might have seen the top in gold for a long long time.
In the meantime, silver is back to about $28, having lost more than $20 per oz since the top earlier this year and the big divergence between gold and silver is making another bearish case for gold...
Full disclosure: no positions on gold at the moment, and still short silver, but might close very soon.