Families gather at South African mine shaft where hundreds are feared underground
The miners are in a standoff with police, who have blocked their supplies of food and water.
Despite losses this past week that saw the price of gold dip to 10-month lows, 23 out of 29 gold dealers, investment banks, futures traders, money managers and technical-chart analysts predict gold will either be flat or head up next week, reports Debbie Carlson of Kitco News.
The US jobs data, which was more negative than expected, was a major force behind the perceived upward swing among the survey participants.
Ralph Preston, senior analyst at Heritage West Financial suggests that if gold does continue its slide, the precious metal is unlikely to break a barrier of $1,525, as “eternal” quantitative easing has not proven sufficiently capable of growing the economy.
Jeffrey Nichols, senior economic adviser to Rosland capital, suggests that with the right amount of shock-therapy, gold can rebound in the short term:
Perhaps this [jolt] will come from across the Atlantic – where recessions are worsening, social discord is on the rise, and the euro appears vulnerable to further capital flight.
Maybe, unpredictably, it will come from some geopolitical upset – on the Korean Peninsula or in the Middle East.
Or, possibly, it will come from Washington’s inability to deal with its mountain of debt, lack of fiscal restraint, or the insidious and still barely apparent effects of sequestration on economic activity and employment.
More likely, the jolt needed to set gold firmly on its long-term upward trajectory will come from a renewed recognition by the Fed and the financial markets that still more monetary accommodation is needed to prevent the economy from stalling. That’s what fueled the September 2011 run to record high gold prices…and this may be what does it again.
Bearish survey respondent Ira Epstein of the Linn Group addressed the geopolitical shock theory specifically, asking “when was the last time if ever you heard a country capable of launching nuclear weapons declare a state of war, threaten to use their weapons and not see gold blink?”
Gold was trading at $1,582/oz, 17:25 EST.
Sources: Debbie Carlson of Kitco News
To read more of Kitco’s excellent metals coverage, click here.
