Gold bounced up this week with opportunists looking for a good bargain after a fall of just over 4% from the high of 915 an ounce last week."Gold is consolidating after touching recent highs," said Christoph Eibl, head of trading at Tiberius Asset Management, noting that there had been some investor selling of gold held in exchange-traded funds (ETFs).
"ETF investors ... are holders rather than traders, therefore the recent drop has some strength." he added.
Gold's investment appeal remains intact however, unlike the mortgage and currency markets still suffering turmoil in the US and with no end in sight.
Barclays Capital said in a report,"External factors such as higher inflation expectations, broader economic concerns, geopolitical tensions and Fed rate easing are likely to drive prices higher."
"On a fundamental basis mine supply remains constrained and physical and investment demand should emerge upon price dips providing a price floor," it continued.
It seems likely that gold will maintain a steady increase but will be more than a week before the 900 is reached again. It seems probable it will stay within the 870-890 range before peaking at around 887 per ounce.
So there is still some time for bargain hunting before gold starts its big climb again!
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