LIVE MARKETS-Gold overheats: from rally to mania?

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GOLD OVERHEATS: FROM RALLY TO MANIA?

Giuseppe Sersale, strategist and fund manager at Italy's Anthilia, says adjectives are running out to describe gold.

"Price action is parabolic," he says, noting that the yellow metal's monthly relative strength index - a gauge of overbought and oversold conditions - has reached its highest since 1973.

"By now it has all the hallmarks of a mania, with people circulating charts of global foreign-exchange reserves and highlighting the surge in gold's share as if these were net purchases, conveniently forgetting that if an asset rises by 60% in six months, its share increases simply because of relative price appreciation."

For Sersale, the trend XAU= looks "unsustainable", much like silver's XAG= rally, even if timing a reversal remains difficult.

(Danilo Masoni)

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