Gold 
“Gold Price Outlook
From the last week of July through the last week of August, gold prices were in a rising trend. Prices reached several record highs during this period. However, prices have been moving sideways since gold reached its last record intraday high on 20 August of $2,546.80 (basis the nearby active October contract) and $2,570.40 (basis the forward active December contract). While prices have not been able to break past these record levels, they have been consolidating near these record levels. The average for gold prices basis the December contract (which has been accounting for around 80% of total open interest) between 20 August and 4 September was $2,539.29.
Prices could swing both ways in the coming months. If economic data suggest that the economy is doing all right, some of this risk premium may come off the gold price. That said, gold prices are not expected to weaken sharply anytime soon and the risk to the upside is greater than that to the downside. Nor are economic data expected to indicate a particularly robust economy.
Based on these expectations, any softness in gold prices should be treated as a buying opportunity. Furthermore, at the time of writing this report U.S. labor data for August was released, which suggested ongoing softness in labor conditions. This further bolsters the probability of higher gold prices in the next few months. If there is broad-based anxiety in the markets, gold prices could soften, possibly toward $2,400 or even $2,350. A decline below these levels is unlikely but the possibility should not be ignored. Also, if gold prices slide to these lower levels, they are unlikely to last there very long given the ongoing political risks and ongoing concerns of future economic softness.
Political risk is one of the primary factors expected to support gold prices even if economic conditions do not paint a dire picture. What happens in politics is nearly impossible to predict, which is partly, or some would say mainly, the reason why gold prices have been rising to record highs over the past several years.
On the other hand, if economic data show ongoing weakness, gold prices will rise, further supported by the political issues. This combination of factors could propel prices to reach fresh record levels.”
*This information is solely an excerpt of a third-party publication and is incomplete. Please subscribe to the referenced publication for the full article. 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.
