The beginning of September brought plenty of worrisome news for precious metals investors.
Heading into the month, during which gold has historically underperformed, investors mulled what to do with their positions as the yellow metal was already trading near all-time highs.
It turns out, gold pushed past $2,600 an ounce and, so far, has been boosted 5% during the month.
UBS, in a note released Tuesday to investors, called the move “unseasonably strong.”
Where’s the pullback?
The analysts suggested that many potential gold investors are waiting for a pullback to enter the market. Still, the lack of price reduction has caused moves higher as investors chase the movement.
“The market could use a breather,” the analysts said. “A period of consolidation at this juncture would be healthy for the market, especially if it allows some weak longs to be flushed out and for long-term investors to jump in at better levels.”
But there haven’t been any signs of that happening, and recent news on China’s stimulus package has pushed commodities prices to new levels.
UBS said it has found in conversations with “various market participants” that sentiment around gold is growing stronger, but noted that the sentiment has not yet been fully backed by positions. Augusta Precious Metals $0 (10 Years) $50,000 "Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings Goldco Vary $25,000 Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee Birch Gold Group Vary $10,000 Since 2003 BGG served over 32,000 customers. A+ rating with BBB, AAA from BCA & has multiple celebrity endorsementsExpand Details
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