Shanghai-based securities brokerage and investment house, BNP Partners has advised clients to consider investing in gold at current prices. It cites the technical picture, the record physical sales, the Commitment of Traders (COT) data and the very real likelihood that any increase in the Fed Funds rate next week will be the only one.

“We’re nearing a 50% Fibonacci retracement from the highs of $1931/oz set in 2011 and there is very strong support around the $1050/oz level,” said Yannick Touré, chief economist with BNP Partners’. “Add in strong physical sales of bullion and coins and the massive fall in speculative short positions from 165,000 contracts to just below 3,000 on the Chicago Mercantile Exchange and there’s a very strong case for going long gold.”

Interest in gold has waned as expectations of an increase in US interest rates have intensified and, with official inflation levels remaining stubbornly low in Western economies, the traditional justification for holding the metal has made less sense.

“We’re urging our clients to consider looking at gold’s value in terms of their local currencies. Gold’s performance against, say, the Japanese yen has been far better than its performance against the US dollar,” noted Touré.

BNP Partners says it expects markets to “sell the news” if the Fed raises rates by the expected 25 basis points and issues a dovish statement. A failure to hike will result in a strong surge upwards according to Touré.

“We advise buying gold bullion on dips in the price but while we can’t rule out a retest of the $1,000/oz level in the short-term, we expect sentiment towards the metal to change once it becomes clearer that the Federal Reserve will be unable to raise interest rates beyond 25 basis points,” concluded Touré.

About BNP Partners:
At BNP Partners, they define effective wealth management as an overall strategy that seamlessly integrates their clients’ personal ROI (return-on-investment) aspirations with their investment management prowess.

Whilst today’s markets can often demonstrate the type of characteristics that have served to hamper the efforts of many traditional investment methodologies to secure the returns they once did, BNP Partners continue to secure exceptional returns for their esteemed clients utilizing a meticulously applied combination of those same traditional methods whilst diligently complementing them with new, pioneering techniques.