Goldman Sachs said this morning that they like gold in front of the G7 meeting on Friday. Their theory is that there will be pressure on China and other Asian countries to make their currencies more elastic, which would be negative for the dollar. Goldman is calling for gold to reach $420 in the fourth quarter and for the dollar to reach about $1.32 against the euro (currently at $1.23).
I think if the dollar gets that weak, gold will make new highs. But Goldman’s comments are probably what’s behind gold’s strength this morning.
Larry
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