Where Is Gold Headed Next?

Source: Boris Sobolev, Seeking Alpha  (10/16/07)

...Big money continued to flow into the Street TRACKS ETF (GLD), which added 15 tonnes in two weeks for a total of 593 tonnes.

Gold has been showing exceptional strength in the last couple of weeks despite a number of factors that could have caused a significant pullback. For example, a number of US economic indicators were recently revised to the upside, reducing the expectations of further rate cuts this year. In addition, Axel Weber, an influential member of the European Central Bank's governing council and president of Germany's Bundesbank, expressed concern about inflation indicating that further monetary tightening could continue in the euro zone.

But this did not deter gold from moving higher. Big money continued to flow into the Street TRACKS ETF (GLD), which added 15 tonnes in two weeks for a total of 593 tonnes.

Is gold going to spike (in the style of the April-May 2006 run) to an all-time high of $850, or pullback to the lower $700’s? A pullback now would be much more favorable as it would be a setup for a further, more powerful run later this year. But we cannot exclude the possibility that an upward spike could occur in the near future either.

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