source: http://goldnews.com
John Taylor, the famous manager of the world’s largest hedge fund, FX Concepts, has come out with his recent view for gold and currencies.
Taylor believes the markets are ready for another risk rally into November which will ultimately fall off sharply. Through this rally, gold prices may reach $1,800/oz again, according to Taylor which should coincide with risk currencies rallying as well. Taylor’s views align with some other major traders as a recent Bloomberg survey indicated that 22 out of 25 traders are bullish on the metal at present. In addition central bank and fund buying is likely to ensue as prices have fallen recently, an event predicted by famed trader Marc Faber. As late November approaches, however, Taylor and his firm see the next of leg of an economic downtrend emerging and gold will not be unscathed in his view. Taylor explains in his recent weekly market insight report,
“…excessive debt built up during the good times must be paid back, investors are forced to sell assets and drive down financial markets. The liquidation even hits ‘safe’ investments like gold.”
The metal could fall as low as $1,000-$1,200 an ounce, by the end of the first quarter of 2012, according Taylor who then advocates buying the metal with both hands. If the metal drops,
“I think it’s probably a big buy… There’s nothing to stop it from going up. Monetary systems are grotesquely screwed up, especially in Europe and also in the U.S. There’s going to be an awful lot of confusion going on for the next decade.”
Taylor says.
Gold prices are down more than -1% today, holding steadily above $1,600 per ounce however. The metal hit a high of $1,921/oz last month before dipping back sharply to $1,532/oz where it entered a major support range:
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