{"id":49596,"date":"2014-04-09T21:53:34","date_gmt":"2014-04-10T01:53:34","guid":{"rendered":"http:\/\/countingpips.com\/forex-news\/?p=49596"},"modified":"2014-04-09T21:53:34","modified_gmt":"2014-04-10T01:53:34","slug":"why-i-reckon-the-gold-price-will-hit-1425-before-too-long","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex-news\/2014\/04\/09\/why-i-reckon-the-gold-price-will-hit-1425-before-too-long\/","title":{"rendered":"Why I reckon the Gold Price will hit $1,425 before too long"},"content":{"rendered":"

By MoneyMorning.com.au<\/u><\/a><\/p>\n

As far as gold<\/strong> goes, I would describe myself as cautiously optimistic.<\/p>\n

Let’s not beat about the bush. I now have a target of US$1,425 an ounce and I’m hoping to see it by May. My stop is just below $1,275. If I’m wrong, I stand to lose about 30 bucks.<\/p>\n

Several factors have led me to this target. <\/p>\n

First, gold <\/a>seems to be having one of those years where it follows the seasonal patterns. That is, a strong January with a small sell-off towards the end of the month. Then a strong February with a peak towards the end of the month, followed by a nasty March. <\/p>\n

If this is the case, then we should see a strong April and May, before another sell-off at the end of May and into June. <\/p>\n

If we’re about to have a strong April and May (and the signs so far are good), then last week’s March low of $1,277 should hold. That means we will have put in a higher low than the $1,180 that began the year. <\/p>\n

Interpreting this as a small uptrend forming, I’d pitch for a higher high than the February peak of $1,392. <\/p>\n

Which leads me to the next big level of resistance at $1,425.<\/p>\n

However, if $1,275 doesn’t hold, then my interpretation that we’re seeing a small uptrend forming is wrong. <\/p>\n

You’ll notice I’m taking a much shorter-term view of gold<\/a> at the moment. There is a reason for this. If you asked me where gold is going to be in a couple of years, I’d find it hard to give you a strong opinion.<\/p>\n

Without wishing to sound trite, there are so many contributing factors to the gold price<\/a><\/strong> that seem to be in a state of indecision. Has the US stock market peaked, or is it just catching its breath? What about the bond market – will interest rates rise, as everybody says they will — or will they fall, as they actually have done this year?  What about the dollar? It’s right in the middle of the trading range — is it going to break up or down? And the pound — is $1.67 the high, or just a temporary barrier on its way towards $2.00?<\/p>\n

Inflation has found its way into the London housing market, as well as into financial assets. Will that inflation stay contained — or will it spread? What about next year’s general election — which way is that going?<\/p>\n

These are all, at least in my mind, unresolved questions, which will affect British buyers of gold<\/a> in some way. Even gold itself seems undecided. Are we at the start of another bull market? Are we still in a bear market? Or just meandering about on the way to nowhere?<\/p>\n

Gold <\/a>isn’t going to $2,000 this year — but I don’t see it falling below $1,000<\/p>\n

In gold’s 1971-80 bull market, gold rose from $35 an ounce in 1971 to $200 in 1975, fell 50% back to $100, and then marched up to $850 by 1980. The gold owner in me wants to interpret the last two years as gold’s ‘75-‘76 moment. But the cynic in me won’t believe it until we see it. <\/p>\n

I was at the (terrific) UK Investor Show last weekend, discussing the outlook for gold with various bods from the sector. Some of the panellists were excellent, I thought  — Amanda van Dyke of Women in Mining, in particular. <\/p>\n

But another was proclaiming gold bug guff that was so generic and regurgitated that, when he declared that we will see $2,000 gold by the end of the year, my first instinct was to take the opposite stance and say gold will fall through a thousand. <\/p>\n

Barring some extraordinary event, like some genuine numbers from China about their gold reserves, gold will not go anywhere near $2,000 this year. I’d be surprised, albeit nicely, to see it even reach $1,500 ($1,475 is my target high for the year). <\/p>\n

However, I doubt it will fall through $1,000 either. And if it can start gently rising here, put in a series of higher lows and higher highs over the next few months, then a strong base will have been built. In the meantime, clearer trends will be becoming apparent in all those other markets I mentioned above. <\/p>\n

I’m hoping that over the next few months we’ll have a better idea if governments and central banks really did save the economy — or if all they did was kick cans down the road. That’s a question that will determine gold’s direction and how much of it to own.<\/p>\n

Gold’s shorter-term gyrations will give a clue as to what that answer will be. I guess, subconsciously, that’s why I am following those gyrations so closely.<\/p>\n

Dominic Frisby<\/strong>
\n Contributing Editor, Money Morning<\/strong><\/p>\n

Ed Note:<\/strong> This article originally appeared in MoneyWeek<\/a>.<\/p>\n<\/p>\n

Join Money Morning on Google+ <\/u><\/a><\/strong><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n


\nBy MoneyMorning.com.au<\/u><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By MoneyMorning.com.au As far as gold goes, I would describe myself as cautiously optimistic. Let’s not beat about the bush. I now have a target of US$1,425 an ounce and I’m hoping to see it by May. My stop is just below $1,275. If I’m wrong, I stand to lose about 30 bucks. Several factors … <\/p>\n

Continue reading “Why I reckon the Gold Price will hit $1,425 before too long”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-49596","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/49596","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/comments?post=49596"}],"version-history":[{"count":0,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/posts\/49596\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/media?parent=49596"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/categories?post=49596"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.investmacro.com\/forex-news\/wp-json\/wp\/v2\/tags?post=49596"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}