Gold To See Support in January, Then Prices to Soften: CPM Group

KITCO NEWS -- In its first week of January, gold is seeing some more safe-haven buying and short covering since decent gains were posted at the start of the week. Unrest in the Middle East and weak Chinese economic data released this week have worked in favor of the yellow metal. ‘We tend to see precious metals go up in the first couple of months of the year,’ says Rohit Savant, director of research for New York- based research firm, CPM Group. ‘We have seen this happen and I wouldn’t be surprised to see prices soften in the later half of this quarter,’ said Savant in an interview with Kitco News. Savant explained that the U.S. Federal Reserve decision to raise rates took weight off of the precious metals, ‘there isn’t this uncertainty that is holding prices down,’ he said. Savant added, ‘We dont see a lot of downside to the precious metals from where we are now but we don’t see prices going up strongly either. We do think the $1,045 -$1,050 level would be the low end of where prices go.’ Supporting gold prices will be the increase in demand from India, ‘there are a lot of marriage dates in February – given the relative softness of prices and the marriage season you might see some uptick – this month could see strength ,’ he said.