I am not exactly a fan of gold. In my opinion, there are better stores of value such as agricultural products or even energy feedstocks. However, the dramatic bond selloff in US treasuries in recent days has attracted not only the attention of the bond vigilantes but also the goldbugs (again).
Technical analysts are calling for $1250 ounce as an important pivot point. (While T/A is inherently biased on the individual practitioner, I've decided to include mention of this piece from Bloomberg b/c of the media attention such targets will call). If enough people start to call a particular target, it becomes a self fulfilling prophecy of sorts:
May 26 (Bloomberg) -- Gold may target a record $1,250 an ounce as a continuation head-and-shoulders pattern may be forming within a longer-term trend, Standard Bank Group Ltd. said, citing trading patterns.
A break and close above $1,050.40 “provides warning that an important breakout” has occurred, Darran Grabham, the bank’s technical analyst, wrote in a note yesterday. A head-and- shoulders pattern is formed when a commodity makes three consecutive peaks, with the middle being the highest. It forms during a series of increases over time.