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In a recent client note, ABN Amro Precious Metals Analyst, Georgette Boele, warned that gold prices risk a sharp fall, as the long positions remain very crowded.

Key quotes

“We continue to think that positions are too crowded and that prices are too high to recommend re-entering longs.”

“We also expect a considerable drop in gold prices.”

“Between now and 3 months we expect another risk-off wave in financial markets. We think that investors will close part of their positions (ETF and/or speculative positions) in gold, silver and platinum.”

“Each time there has been some price weakness it seems that investors are buying gold on dips. Gold ETF positions have made a new record and stand just under 100 million ounces. After some liquidation of speculative positions, speculators have also showed renewed interest in gold.” 

“Very bullish on gold, projecting the yellow metal to finish Q3 at $1,775 an ounce and Q4 at $1,800 an ounce.”