Precious metals – Another risk asset or a flight to safety?

Currently we believe the precious metal market is likely to remain rangebound over the coming weeks due to the uncertainty surrounding events in Japan and MENA, ambiguity in the European Union, completion of QE2 in the United States and the current globally low interest rate environment beginning to come to end. While a tremendous amount of headline risk exists, gold and silver are likely to be torn between those who perceive it as another “asset class”, thus trading in-line with risk and those who believe its “flight-to-safety” play. While these investors battle it out, expect volatility to remain high and opportunities to remain limited, thus decisive action may be necessary.

With gold currently sitting a mere $20 off its All-time high and silver’s 30-year high just above near $36.70/75, both are well within striking distance of a further advancement. However, beyond the fundamental indecision, our FOREX.com proprietary model suggests both gold and silver are more likely to remain rangebound than see a sustainable breakout going forward. Therefore, in gold we believe a $1320-40 to $1435-50 range is plausible and for silver we think $30-32 to $36-38 makes sense.

Источник: Forex.com

21.03.2011