Gold just finished its worst week since the beginning of June, dropping 1.5 percent. But the precious metal is poised to resume its recent ascent, experts say.
“Concerns about overall global economic health have kept gold in a pretty tight trading range, but this is typical just before some type of breakout, up or down,” Nathan Rowader, portfolio manager of the Forward Commodity Long/Short Strategy Fund, tells MarketWatch.
“Right now, the weight of the evidence points toward higher prices.”
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Spot gold has traded between $1,683 and $1,741 so far this month. The December Comex contract closed Friday at $1,759.70.
Market participants are bullish on gold largely because of renewed central bank easing around the world, from the United States, to Europe, to China, to Brazil.
Going forward, “in 2013, the developed world is going to have to deal with its massive debt problems and policies that have spent the last few years devaluing local currencies,” Dawn Bennett, portfolio manager of the Bennett Group of Funds, tells MarketWatch.
“As this happens, gold will be one of few havens available to investors looking to protect their wealth.”
To be sure, not everyone is convinced of gold’s allure.
"We are starting to see some improvement in the U.S. economy, so the duration of quantitative easing may not be as long as what was initially anticipated," Phillip Streible, senior commodities broker at R.J. O'Brien, tells Reuters.
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