Gold slips back below $1,700/oz. but BofA sees $3,000 ahead

Gold prices (XAUUSD:CUR) dropped to a near two-week low, while silver, platinum and palladium all tumbled as investors scrambled for cash to cover losses in other asset classes driven mainly by the crash in oil markets.

Commodity traders also speculate that gold also could be facing some resistance after prices punched above $1,700/oz. yesterday; June Comex gold closed -1.4% to $1,687.80/oz., while May silver settled -4.7% at $14.87/oz.

"Oil has really got the entire commodity complex down with it," says RJO Futures analyst Bob Haberkorn. "A lot of people are exiting positions that were very profitable, with a wait-and-see attitude to see whether there's further spillover from the energy into precious metals."

Meanwhile, Bank of America analysts raise their 18-month gold price target to $3,000/oz. from $2,000 previously, in a report titled "The Fed can't print gold."

"As economic output contracts sharply, fiscal outlays surge, and central bank balance sheets double, fiat currencies could come under pressure," the firm says, adding "Investors will aim for gold."

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