Gold Outlook for Q4: Buy or Beware? (GLD, IAU, SGOL, AGOL)

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October 3, 2011 11:45am NYSE:AGOL NYSE:GLD

Gold prices rose over $100 an ounce for the third-quarter settling at $1,622.30. The 6.5% gain was no easy ride for investors who saw prices north of

$1900 just last month. The turbulence has refueled debate over the precious metal’s stature as a safe haven investment, with many viewing the September 10% sell-off as a sign the bubble burst. Alix Steel, reporter covering the metals beat for, couldn’t disagree more.

“Prices are broken, you definitely can see that, but I don’t think the bubble has burst here,” she says. Steel points out that the most recent rally in gold has spanned over two-years, and the last two-months alone have seen prices jump over $300 an ounce. “Prices have a right to come off,” she says, expecting volatility to persist in the fourth quarter.

“I don’t think we’re going to see a huge rally right off the bat. I think we’re going to have a period of consolidation,” she says. However, her ear is to the wall on the gold trade and she’s still hearing calls from traders that have gold rebounding by year-end up to levels between $1,800 – $2,000 an ounce.

See the full “Breakout” video below:

Related ETFs: SPDR Gold Shares (NYSE:GLD), iShares Gold Trust (NYSE:IAU), ETFS Physical Swiss Gold Shares (NYSE:SGOL), ETFS Physical Asian Gold Shares (NYSE:AGOL)

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