Gold bulls are getting more confident by the day that the yellow metal will break the psychological $2,000 an ounce barrier in the near future.
At the moment gold is now sitting at about $1,890-$1,895 per ounce after getting nearly $1,895 in London earlier, but looks ready to possibly rally to explore the route through the $2,000 price.
A combination of continued weak economic data coming from just about all quarters of the globe coupled with recent moves by the Swiss and Japanese central banks to weaken the Swiss franc and the yen has triggered more demand for precious metals. And any hint of a third round of quantitative easing by Ben Bernanke on Friday at the Jackson Hole central bankers' meeting on Friday may well send more investors scurrying for safety.
But here is caution in the air over this as some believe that prices up to $2,000 will be achieved but that there may well then be a drop for a short while.
Commerzbank strategists Axel Tudolph is quoted by Bloomberg as saying that 'I think we're overextended in the short term, I wouldn't be surprised if we were to fail around $1,900 to $1,922 and retrace a little bit for a few days or so. It's still very bullish longer term. Longer term, I think $2,000 will definitely be hit.' And economist Denis Gartman said that prices would go 'parabolic', technical shorthand for overbought.
Speaking to Bloomberg, chief investment officer at Steel Vine Investments LLC, Spencer Patton, said that should Bernanke announce more QE on Friday that gold could be at $2,000 on Monday. But he did say that was, in his view, unlikely. Overall, he said that there was a slim chance that gold would hit $2,000 by 29th August.