Rosenberg Says Gold ‘Will Go to $3,000 Per Ounce’
BY MARK O’BYRNE
A close below $1,580/oz could see gold test support at $1,523/oz and $1,533/oz – the lows in December and September 2011 respectively.
Gold fell after shares in Asia were hit by JPMorgan’s massive $2 billion loss, political turmoil in the euro zone and also by weak economic data from China. The JP Morgan loss may be higher than $2 billion and could lead to sharper sell offs in markets which could lead to further gold weakness.
However, the JP Morgan loss is gold positive as it shows how little reform there has been of Wall Street and the global financial system which continues to resemble a casino. It also shows that systemic risk remains.
Gold tracked equities lower despite the JP Morgan loss, deepening worries about Europe’s debt crisis, Chinese economy concerns and their impact on global economic growth.
Safe haven gold is again showing short term correlation with risk asset with sell offs seen across risk assets such as equities, industrial metals and oil this week. It seems likely that some more speculative players are again selling gold on the COMEX to cover losses suffered in other markets.
Gold is set to fall by more than 3% this week, the deepest drop since early March however there are technical and fundamental factors that suggest we may be near an intermediate low.
There has been far less selling of physical bullion this week and indeed a small degree of buying the dip.