By Allen Sykora Gold could trade up to $1,700 an ounce or down to $1,500 in the near term, depending on how the U.S. budget/debt-ceiling impasse plays out, says TD Securities. “If the U.S. government does not act in time and in a comprehensive way, where there are real, sustained and predictable deficit reductions, investors will likely continue to buy gold and silver as a hedge,” TDS says.
“We believe that there is a real possibility that (gold) could go north of $1,700/oz in the near term, with silver at about $45/oz. Conversely, an agreement could very well move gold to $1,500/oz and silver materially below the $35/oz mark.
It seems to us that taking naked positions in this space is quite risky, as it will be the headlines driving the price and not the fundamentals.”