02.07.2013 - Precious metals sell-off is overdone
Precious metals, particularly gold and silver, were hit hard last week as investors continued to re-assess the outlook for US monetary policy. The sharp rise in US real interest rates has been the main trigger for the correction in gold and silver prices. In our view the reaction of bond markets to Fed comments has been overdone, and ultimately real interest rates will fall back from current levels. It appears that the Fed agrees that bond markets have over-reacted and key FOMC members appear to be trying to talk rates back down now. With gold speculative shorts at all-time highs and market sentiment almost unanimously negative, we believe there is scope for a price reversal in the coming weeks and months. Silver should benefit from a gold price rebound......................................Full Article: Source
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