Gold price moved sharply higher

Gold price moved sharply higher Wednesday morning, gaining $31.00 to $1,658 per ounce. After sliding 6.5% over the past two trading sessions, the price of gold moved higher on bargain hunting among investors and traders. Silver spiked higher by a huge $1.82, or 5.9%, to $32.56 per ounce. On a closing basis, gold’s sister precious metal declined 24.4% over the last six trading days. Optimism that European leaders are beginning get serious about stemming the waning confidence in the continent’s banking system helped buoy global stock and commodity markets.

Marc Faber, publisher of The Gloom Boom & Doom Report, provided his latest thoughts on the gold price in an interview with CNBC on Monday. Faber, who has been correctly bullish on gold for most of the past decade, noted that the price of gold has become “very oversold” in the near-term. “We overshot on the upside when we went over $1,900,” he asserted, and “We’re now close to bottoming at $1,500.”

Faber subsequently cautioned that if the $1,500 level does not hold, the gold price could fall to between $1,100 and $1,200 per ounce before finding a bottom. However, despite the potential for a more severe gold price correction, Faber contended that “I don’t think the long-term trend is broken.” Although he did not provide a specific gold price target at this time, Faber predicted earlier this year that the price of gold is likely to eventually surpass its inflation-adjusted all-time high of approximately $2,300 per ounce.

David Rosenberg of Gluskin Sheff – another long-time gold bull – also reiterated his positive long-term outlook on the gold price yesterday. In a note to clients, Rosenberg wrote that “The fundamentals for gold, in terms of being a hedge against the growing lack of integrity in the global monetary system have not changed one iota despite the severe falloff in recent weeks.”

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