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Gold prices remain below $1,200

24 July 2010

The price of gold remains flat below $1,200 and not much above its 60-day low of $1,180 in mid-morning New York trade. The current gold price spot rate in New York is $1,190.70 per ounce after a closing price of $1,194.50 on July 22nd.

Though not far removed from its mid-June all time high price of $1,261, gold prices have been in a consistent downward corrective mode in the last month.

Generally perceived as one of the safest investments during economic uncertainty, gold has apparently reached a point in the short-term where investors are pausing to look for more signs of economic recovery.

After falling from $1,261 to below $1,200 in less than two weeks time to finish June, gold prices have operated in a relatively modest $30 trading range between $1,181 and $1,211 since the start of July.

It remains to be seen what will happen with gold prices in the short-term. They could easily continue to pullback toward $1,150 support, which has been widely suggested by analysts, or perhaps even lower toward $1,100.

However, the long-term upward trend could renew in very short order, as well, if economic data reports cause more concern and weakness in the dollar. The swift decline from the high point in June could just as quickly be reversed in a matter of days if speculators feel upward momentum has returned.

There is no question that long-term charts still indicate the possibility of a longer and stronger rise for gold prices. Gold is up nearly $950 from its upward trend starting point of $255.30 in 2000.

Other than a few corrective pullbacks, there have really been no major setbacks for gold since late 2008 when it sharply fell from its initial break of $1,000 to the $700 level. The price of gold gained nearly $500 from that late 2008 low to its first break of the $1,200 mark toward the end of 2009.

Several recent forecasts and surveys show most top analysts expect gold to break $1,300 before year’s end, with end of year high projections ranging anywhere from the $1,300 mark to near $1,800. As for the near-term, the question is “How low can gold go?” The answer might come very soon.

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