Gold Set for Dramatic Fall If Central Bankers Disappoint

The recent rally in gold, which touched a near six-month high this week, is unlikely to last, say commodity analysts, who forecast prices could fall 10 percent over the next month if central bank actions disappoint.

Trading close to key resistance level $1,700 an ounce, gold prices [XAU= 1693.0601 -1.08 (-0.06%) ] have had a bull run over the past one month, rising 5.5 percent, on expectations of monetary easing by both the U.S. Federal Reserve and the European Central Bank (ECB). (Related: Largest Holders of Gold)

But Warren Gilman, CEO of research firm CEF Holdings, says this rally has not been justified given the lack of clarity from policymakers in the West.

The ECB is scheduled to meet Thursday and the Fed next week, and Gilman warns that a sharp fall in gold prices could be coming very soon if the outcome of these central bank meetings disappoints.

Read Full Article from CNBC

- Posted: 2012-09-05 11:27:28

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