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Why do Sinclair and others now expect $600 to $682 gold price levels?

*Financial Times, by Ishita Ayan Dutt, January 9, 2006

“Gold scaled new heights on Monday, gaining one per cent to a near 25-year peak in early trade, driven by news of China’s initiative to explore diversification options for its foreign exchange holdings.

Spot gold rose to $544 an ounce, its highest price since January 26 1981 when it hit $579.50. However it shed some of its gains and retreated to $541.10/$541.90 an ounce, holding above late New York levels on Friday of $538.30/$539.00.

Technical analysts set a short-term target level at $550 if gold ended above $542 at the close of today. An European dealer said that funds were repositioning for a move above $600.

Apart from China, other factors are contrinuting to gold’s recent rally. Russia’s central bank in November said it may double its gold reserves. Other central banks such as South Africa and Argentina have also indicated their readiness to diversify their foreign exchange reserves. Central banks, mainly in the US and Europe, hold almost a fifth of the world’s gold as reserve asset.

Gold helped other precious metals make gains. Platinum moved towards the key psychological level of $1,000 an ounce. Spot platinum rose to $998/$1,002 an ounce from $993/$998 late in New York. Palladium rose to $270/$275 an ounce from $267/$271. Silver climbed to $9.14/$9.17 from $9.09/$9.12.”


*This information is solely a highlight of the opinion of a third-party publication and is incomplete.  Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.

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