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Gold Holds Around Key $1620 Level Following ECB Action says Pan American Metals of Miami

Top Quote Gold holds on to 200-day moving average following ECB loan offer. End Quote
  • (1888PressRelease) December 23, 2011 - MIAMI, FL - Gold traded higher, then lower again, today, settling close to the $1620 mark, which is vital psychologically, as a key technical level. The ECB has loaned euro zone banks 489 billion euros at low interest rates for three years. If banks choose to buy sovereign debt then this is basically quantitative easing under another name. It remains to be seen how this action will affect the price of gold in the short and long term.

    If this move raises fears of inflation, then gold will re-emerge as the safe haven of choice, in the long term, for investors concerned with wealth protection. On the other hand, if gold continues to act as a risk asset and move in tandem with the euro, gold prices could drop, in the short term. A stronger dollar is currently keeping a lid on gold bullion prices, making it more expensive for people to buy gold in other currencies.

    In terms of physical demand, India, due to a depreciating rupee, is finding current gold prices too high. Additionally, this is not considered an auspicious time for gold buying. However, from mid-January, when this inauspicious time ends and the Lunar New Year approaches, it is likely we will see a marked increase in physical demand from Asia.

    "Many analysts see gold's recent correction as possibly the penultimate correction before a rapid move upward," says Bill Hionas of Pan American Metals of Miami. "The $2000 an ounce goal is still within reach in 2012."

    Traditionally, the last weeks of the year produce a 'Santa Claus rally' in countries where Christmas is celebrated with a national holiday. Assuming this year follows the normal trend, we should anticipate a further increase in price before the end of the year.

    About us:

    Pan American Metals of Miami, LLC is a group of traders, investors and account executives that combines many years of experience to help clients invest in bullion. PAMM provides an individual investment service and is based in Miami, Florida for convenient access to both North and South American investors.

    Website: http://www.panamericanmetalsofmiami.com

    Press Contact

    Debbie Bailey
    Executive Administrator
    Pan American Metals of Miami, LLC
    Email: dbailey ( @ ) investpanam dot com
    Website: http://www.panamericanmetalsofmiami.com

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