-- Posted Thursday, 14 May 2009 | | Source: GoldSeek.com
Gold and silver were essentially flat yesterday and consolidated on recent gains despite a slight dollar recovery and marked weakness in equity markets.
Gold has fallen somewhat in Asian and early European trading but still looks good from a technical perspective. A close above $932/oz should see us quickly target the $960/oz to $965/oz level which when breached should see us retesting the intra-day high of $1,006.30 reached on February 20th.
A weekly close above $1,006/oz, would likely see a very large infusion of cash into the gold market as there are many participants on the sidelines waiting for this bullish technical development.
With the credit ratings of the US and UK under threat and the cost of insuring UK government debt now higher than chocolate manufacturer, Cadbury’s, gold’s safe haven appeal looks set to increase in the coming months. Especially as the issuance and supply of government bonds is set to surge as budget deficits balloon internationally while gold supply remains anaemic at best (news today that South African gold production fell 7.6% for the year in March).
With inflation likely to rise in the coming months, those saving for a rainy day may soon turn to the finite inflation hedge that is gold.
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