Prices should continue to consolidate in the wide range of $535-$555 in the near term, though the underlying sentiment remains bullish and downside appears limited at present.
Range-bound trade looks likely to continue for some time, though we see potential for prices to break on the upside after this consolidation phase.
The market continues to appear well-supported and we see the overall macroeconomic and geopolitical environment as favorable for gold.
Speculative activity will continue to dominate price movements, with fund interest based on justifications such as economic slowdown, inflationary concerns and hopes of Asian central bank buying and soaring physical demand.
The continued strong performance of commodity investments, allied to the desire of many institutional investors to diversify their equity and fixed income exposures, suggests that commodity investments are likely to continue growing strongly in 2006.
We continue to question how close the situation now is to either complete company withdrawal from the area or a strike by workers due to the obvious lack of security.
We continue to expect two more rate hikes, but the dovish tone of the minutes suggest that upside risk to this forecast is limited.
This market continues to look very strong ... Enthusiasm among speculators is founded on its constructive fundamentals and general interest across commodities.
Absent new developments in credit, the continued synthetic demand, the hedge fund bid, strength in the leveraged loan market, stability in U.S. Treasuries, and credit appetite from Asia will likely continue to support the market overall.