Gold: not a bull market but downside is limited

London

GOLD bears have been routed in recent weeks as investors and central banks have boosted purchases. Other precious metals, notably silver, platinum and palladium have also benefited from the change in market sentiment.

"It's too soon to call a bull market, but the undertone is constructive," says Ross Norman, the CEO of Sharps Pixley, a London bullion house. "The price must first break US$1,300 an ounce, but the key level is US$1,360 as three times in recent years, the price has failed to break that level."

He believes that the downside of gold is limited as central banks are believed to be buying when the price dips.

Central bank activity in the bullion is kept secret but significant buyers in re…