Gold Bulls Play Chicken on Profit Taking (GLD) (IAU) (SLV)

September 18, 2012 11:47 AM EDT
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Despite a modest selloff yesterday, the spot price of gold is back near recent highs at $1777. Market euphoria following the announcement of planned QE3 by the Fed last week has faded, and traders are back to wondering how much higher the precious metal can go. The Fed's comments squeezed most of the bearish sentiment out of precious metals and for now trading appears to be a game of chicken among longs as they size each other up, wondering who is going to take profits first.

Traders will be focused on housing data in the U.S. tomorrow, and weekly jobless claims later the week. The biggest risk for gold in the short term could be hawkish comments from Fed officials as they make speeches later this week.

SPDR Gold Shares ETF (NYSE: GLD) is higher by 0.75 intraday on Tuesday.

iShares Gold Trust ETF (NYSE: IAU) is higher by a similar amount.

iShares Silver Trust ETF (NYSE: SLV) is tacked on 1.9 percent to 33.61.

Spot gold trades at $1767 per ounce and silver trades at $34.65.

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