Higher Summer Base In Gold Ups Odds Of Record High Later In Year

(Kitco News) -- Futures-industry veteran Ira Epstein looks for gold to rise into year-end. Seasonally, gold rallied from the end of July to the end of December in nine of the last 10 years.

 “The higher the base gold now makes, the better the odds of gold hitting a new all-time high later this year,” says the director of the Ira Epstein division of the Linn Group. “This is not yet the seasonal time of year when gold turns up, so I expect spikes both up and down are part of gold building a base for higher prices to work from.” The sharp rally from last week’s lows--$1,481 in the Comex December contract—suggests that a “bottom of importance is in place,” he says. Epstein describes the rally as “V-shaped,” which he says means it likely “forced some short covering while at the same time is attracting those who think the rally has left them behind.” The rally from the July 1 low is due to European debt concerns and the political fight over the U.S. debt ceiling, he says. “These concerns have created a situation where gold acts as a proxy for world unease,” Epstein says.