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ScotiaMocatta: Lower gold price could provide buying opps

Bnamericas
Gold prices could fall during the coming months, which is likely to provide a good buying opportunity for investors, metals brokerage firm ScotiaMocatta said in its June "Metal Matters" report. During May gold prices fell from a high of US$429.15/oz on the 5th of the month to a low of US$414.450/oz on May 31 on the London Bullion Market, mostly due to the rise in the US dollar. "The sell-off in gold has been driven by fund liquidation selling but the weaker price has also encouraged good physical demand, especially in Asia," ScotiaMocatta said. However, ScotiaMocatta predicted the dollar's strength may not last very long and that it could be joined by a weaker euro in the wake of France and the Netherlands rejecting the proposed EU constitution. "If this turns out to be the case, then gold's safe haven status may well receive a significant boost," said the report. Gold's relatively low price could attract such safe-haven buying, according to ScotiaMocatta. Meanwhile, silver went the opposite way to gold during May, starting at US$6.850/oz on May 3 and rising to US$7.130/oz by the end of last month. However, ScotiaMocatta predicted that silver will probably fall back and follow gold's lead once again.

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