Gold Buying Opportunity

Gold Dip "Offers Buying Opportunity" as Zero Rates Seen Until End-2010 London Gold Market Report THE PRICE OF GOLD slipped early Thursday in London, losing almost 2% from yesterday's new Dollar record as global stock markets also fell despite a report from the OECD which doubled 2010 growth forecasts for the world's richest economies. The US Dollar rose sharply on the forex market, but the drop in gold outpaced the drop in non-Dollar currencies, helping the gold price in Sterling retreat 1.1% from Wednesday's 9-month highs. Eurozone investors now looking to buy gold saw the price dip €7 per ounce from yesterday's break above €770 – the best level since Feb 23rd. "As of yesterday, the futures market assigns a 65% probability to flat US interest rates until Jun 2010," says Walter de Wet in today's Commodities Daily from Standard Bank. "We still see no rate hike in 2010 (unless it's in Q4)...and low rates should continue to support precious metals." Crude oil and base metals also fell as the US Dollar rose early Thursday, led by copper's retreat from new 14-month highs. US Treasury bonds rose but UK gilts and German Bunds fell, pushing up the yield offered to new buyers. "There is a good chance that when New York opens, this dip [in gold] will be seen by many as a good buying opportunity," said one London dealer this morning, citing "technical support" at $1130. Hedge fund manager John Paulson reportedly met with investors yesterday to announce a new gold fund, due for launch in Jan. 2010. Both Reuters and Bloomberg cite attendees at the meeting who said that Paulson – estimated to be worth $6 billion himself – will put $250 million into the new offering. Paulson & Co. currently holds over 10% of the $30 billion under management in Gold and gold-related investments. "Higher highs and higher lows keep trend followers looking for a continued bullish move," says Scotia Mocatta in its daily note. "Our measured target is 1188." Read more...