Source:Marketwatch 28 Nov 2006Betting on more dollar weakness
Overall, the "street is grasping at straws," said Ned Schmidt, editor of the Value View Gold Report. Housing sales in October were not as bad as expected and "that gave an excuse for a rally in paper and some selling in gold," he said.
Instead, gold investors should be buying on all price dips," Schmidt advised.
When most of New York was closed for nearly three days for the Thanksgiving holiday weekend, the "rest of the world" showed that it "clearly believes the dollar will fall further – a lot further," said Schmidt.
And "with negative trends in place for the U.S. dollar, gold should trade $675-$700 by Christmas," he said, adding that the market may well see a "new cycle high for gold in January."
Echoing this bullish view was James Moore, analyst at TheBullionDesk.com. Gold's "increasing correlation with the euro and return of investor money, as players begin to diversify away from the greenback, should see gold challenge $650 and eventually $685 before year-end," Moore said in a note to clients.
Gold has gained more than $30 an ounce since the beginning of November, its rally accelerating in the past week as the dollar weakened on concerns about a slowing U.S. economy.
Potentially flavoring the trading in gold, this week's economic calendar contains several other key pieces of U.S. data – on consumer spending, manufacturing and a second reading on third-quarter gross domestic product.