Price of gold is likely to remain in this range for the next couple of months

Although the gold price bounced back from Tuesday’s 2.1% sell-off, it remained near the middle of its recent $1,600-$1,670 trading range. Michael Lewis, an analyst with Deutsche Bank, contended that the price of gold is likely to remain in this range for the next couple of months. “My sense is that gold is a bit like silver after its collapse (in May 2011) from almost $50 to around $35,” Lewis noted. “It was incredibly erratic but with quite a stable performance over about six to eight weeks.”

Lewis went on to say that “I don’t think there is going to be much clear direction for gold at the moment. To some extent the market is just a bit broken, and needs to repair itself… the strength that we saw (earlier this year) is going be difficult to repeat.”

The gold price stabilized near $1,650 per ounce Friday morning after weekly jobless claims in the U.S. came in roughly in-line with expectations at 401,000. The spot price of gold climbed to as high as $1,656.10 earlier this morning, but pared its gains heading into the open of U.S. equity markets. In contrast to the gold price, silver climbed $0.27, or 0.9%, to $30.76 per ounce.