Gold prices declined last week breaking its run of weekly gains that started in the middle of May.
The metal valuations it seems to have difficulties breaking above the $1550 level, where traders observed some heavy selling. Also, a resistance line from April 29 adds its weight to the the barrier.
However, Standard & Poor‘s has elevated its metals price projections for the coming years. S&P said their gold price assumption for the remainder of 2011 was raised from $1,100 per oz to $1,200 and from $1,000 per oz in 2012 to $1,100. S&P Credit Analysts Andrey Nikolaev and Mark Puccia said they were concerned because currently “about half of the demand for gold comes from financial investors. The key risk remains a sharp decrease in investor demand as the uncertainty in the global economy declines.” They also believe the long – term price assumption “remains conservative at $900 per ounce,” the analysts added.
For the medium – term, many analysts predict gold will continue to range sideways for the summer months, a not unusual episode for gold during the summer stagnation. Many analysts still believe there may be more room to the upside after the summer.
