Mineweb reported yesterday that although gold has performed well in February, a month that is historically not good for the metal, UBS AG (NYSE:UBS) expects its luck to run out in March, also typically a poor month for gold prices.
As quoted in the market news:
‘This anticipated seasonal weakness ties in with our one-month call for gold prices to reverse to $1280 from here,’ UBS says.
The main reason for its view is that, while the rise since the beginning of the year has been orderly, it has been a fairly sizable move and over the course of the period, gold net longs have risen 114%.
And, it says, ‘given that investor participation has so far been limited to those with short-term horizons, the temptation to book profits is very strong and we expect this to dominate up ahead.’