In light of golds negative reversal on Tuesday, the odds of a more meaningful
correction in the yellow metal have increased, according to UBS analyst Edel
Tully. In a note to clients, Tully wrote that golds rally in recent weeks
surprised most in the market, even those in the most bullish camp. She went on
to say that Given the speed of the recent rally, the possibility of a correction
is rising as investors look to bank profits. However, the UBS analyst noted that
Even if a $150 or more pullback were to materialize, we'd strongly view it as
a good buying opportunity. A pullback of that magnitude would take the price of
gold from its new record high above $1,900 to at least $1,750 per ounce. With
regard to silver, Tully wrote that as for those traders and investors who missed
out on golds recent run, Instead of playing gold from the short side, they
prefer buying silver. That trade may well extend this week.
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