CO:Credit agricole favors gold on dips below $1,500, \'cautious\' on silver
By Allen Sykora
Credit Agricole CIB says it would buy gold on probes below $1,500 an ounce but is more cautious on silver. Gold continues to consolidate near $1,500 an ounce. “As geopolitical factors have waned, the focus has shifted towards the USD (U.S. dollar), inflation and the euro-zone debt crisis,” Credit Agricole CIB says.
“Any signs that inflation is easing are likely to weigh on gold as are the ongoing outflows from the physically-backed gold ETFs, which, together with the increased price volatility, could be warning of a price reversal or at least a degree of two-way risk in the market now and much less of a one-way bet.
Further downside probes towards USD1,470/oz, though, should provide opportunities to get long, as supportive fundamentals and bullish charts suggest that upside potential remains far from becoming exhausted.”
However, the bank says, the volatility and recent margin hikes in silver futures could mean some investors use any rallies to exit the market. “We remain cautious towards silver and advocate entering the market only should prices fall to USD25/oz.”
