Barclays says current gold prices "not justifiable"
New York (Platts)--18Apr2006
Gold prices appear to have firmly entrenched themselves above the $600/oz
level, with Tuesday's rally on COMEX advancing the nearby June contract to
a settlement price of $623.30/oz. But this level is not justifiable by the
metal's fundamentals, according to Barclays Capital, which had pegged
technical resistance at $621/oz before gold soared above that level.
"While we think such high prices are not justifiable by gold's commodity
fundamentals in terms of market balance and inventory levels, the combination
of a surge in oil prices above $70/barrel, geopolitical tensions and strong
momentum is dominating at present, and further gains cannot be ruled out,"
said Barclays in its Commodity Daily Briefing.
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