Nothing Like a Healthy Correction for Gold
Nothing Like a Healthy Correction for Gold, Says Rosland Capital’s Senior Economic Advisor Jeffrey Nichols
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Press Release Source: Rosland Capital On Tuesday November 16, 2010, 10:10 am EST
NEW YORK, Nov. 16, 2010 /PRNewswire/ — Jeffrey Nichols, Senior Economic Advisor to Rosland Capital (www.roslandcapital.com), had the following commentary based on recent market activity and the week ahead:
On November 9, 2010, as gold was registering new all-time highs near $1,425 an ounce, we warned the metal was “certainly vulnerable to a setback, and a substantial one at that.”
In part, we thought that the influx of speculative buying that contributed to the upward spike over $1,400 would inevitably lead to profit taking. And, indeed, it did. From it’s all-time high early last week, gold shed as much as $70 an ounce, trading at times under $1,360.
But there is more to the story of gold’s latest up and down … and more to suggest that gold’s strong upward price trend will soon resume:
First, Market Reaction to the World Bank Statement on Gold
Fueling gold’s ascent early last week was an op-ed article by World Bank president Robert Zoellick in Monday’s prestigious Financial Times suggesting the leading economic powers consider making gold part of a new “cooperative monetary system.” Gold bugs and much of the financial media jumped on the news, believing that the World Bank was suddenly advocating a return to the gold standard.
