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Gold prices have risen sharply over the past four days, from $1,816 / £45.47 to as high as $1,897 / £47.50. CPM has written about a spike to $1,920 / £48.08, in its early July Precious Metals Advisory. This price seems achievable in the next five days, as the gold market moves toward the first delivery date for the August Comex gold futures contract on Friday 31 July.
As of Thursday 23 July there still were 26.1 million ounces of August futures contracts open. Already 25.1 million ounces of August contracts had been bought back and rolled to December. More than half is yet to come, and the roll may be expected to continue to apply upward pressure on gold prices until it is resolved.
With gold prices up roughly $80/ £2.00 in four days the price obviously is vulnerable to spikes down. The August roll may keep prices from doing that until the first week of August, however.
Global and U.S. economics, political, and financial market imbalances meanwhile will continue to cause investors to want to be long gold. Tellingly, the August roll is mostly into December, and not the next nearby active October contract: Few investors or traders want to be short gold in October, in advance of the U.S. election on 3 November and in the face of looming Brexit, the shift from Libor, and other major transitions.
Note: Discretion should be allowed at +/- $2.00 / £0.05 from the target.
US$/GBP exchange rate used: 0.78