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Money Managers Bullish on Gold 

Release Date: 
Monday, October 31, 2011

Progress in the euro zone towards an agreement to resolve the region’s debt crisis pushed gold prices higher last week and sparked a wave of investment in gold.

Gold is well positioned for renewed gains, according to analysts at Commerzbank.  "We don't believe that gold will come under more pressure, but will be able to resume its upward trend after the correction," the analysts noted.

Seasonally strong demand should also continue to provide a downside cushion for gold, said analyst Suki Cooper of Barclays Capital. "We are keeping the focus higher," she said.

Mitsubishi analyst Matthew Turner commented on the higher gold prices last week, noting, "Gold often trades in line with the other commodities with (quantitative easing) and inflation and those kinds of things obviously supporting the price of both."  The analyst added, "this week, it's all about the economic data and central bank policy meetings."

A U.S. Federal Reserve policy meeting is scheduled for this week along with a major Group of 20 (G-20) meeting for coordinated efforts and pledges to help stabilize global financial markets.

(Sources: "Gold Falls as Dollar Gains," Wall Street Journal, October 31, 2011;  "PRECIOUS-Gold slides 2 pct on Japan's yen intervention,"Reuters, October 31, 2011; "PRECIOUS-Gold steady as investors shift focus to G20," Reuters, October 31, 2011)

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†This material has been prepared for private use. Although the information in this commentary has been obtained from sources believed to be reliable, Goldline does not guarantee its accuracy and such information may be incomplete or condensed. The opinions expressed are subject to change without notice.

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