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UBS calls gold overbought Add to ...

Nice call by UBS on gold Monday, with the December contract down $13.80 (U.S.) an ounce at $754.60. "With ... speculative interest in gold and oil near all-time highs, a near-term peak in gold may be close at hand," it suggests, urging investors to take profits. Bullion began to sink before the U.S. stock markets opened on Monday, following crude oil down. Then the euro started to slip, and that weakness spilled over to lift the U.S. dollar, which often weighs on the gold price. "The speculative position in gold now sits at extreme levels," UBS warns. Moreover, with crude oil "more expensive than can be justified at current levels ... it would not surprise us if a correction in the oil price takes gold with it, at least in the short-term." The front-month November crude contract on the New York Mercantile Exchange was recently trading down $1.26 a barrel at $87.34.

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