Gold price is in a new chart pattern and there is no telling how high it will go – Wells Fargo
Gold price is in a new chart pattern and there is no telling how high it will go – Wells Fargo by Neils Christensen for KitCo News
The gold market has been stuck in a fairly narrow range for nearly two months, and time is quickly running out if the precious metal is going to see a new high above $2,000 an ounce by year-end.
However, one market analyst says that gold’s destination is less important than the journey that it is currently on. In a recent interview with Kitco News, John LaForge, head of real asset strategy at Wells Fargo, said that he is maintaining his updated year-end target at $2,100 an ounce; however, he added that time is running out to achieve that goal. Rather than looking at year-end targets, he said that investors should pay attention to the long-term uptrend.
LaForge noted that since hitting an all-time high above $2,000 an ounce, gold has managed to hold critical support around $1,850 an ounce. He added that this is an indication of underlying strength in the marketplace.
“The fact that we pull back to $1,900 and then don’t really get below that for long, I think we’re on a new technical chart now,” he said. “Direction really does matter more than price targets because when it breaks out when you get a new chart like this, you just don’t know how high.”
LaForge’s outlook comes as gold prices managed to hold support around $1,850 an ounce after prices fell by $100 on Monday. The gold market saw its worst one-day selloff in seven years after Pfizer and BioNTech released positive news about a potential vaccine for the COVID-19 virus.
Although LaForge said he is skeptical that gold prices can push back above $2,000 an ounce before the end of the year, he is a lot more confident that prices will hit his 2021 target of $2,300.
LaForge said that he remains bullish on gold as nations continue to print money and devalue their currencies. He added that the U.S. hadn’t felt the major effects of devaluation because it continues to hold the coveted reserve currency status. However, he added that it’s only a matter of time before the U.S. joins in the race to the bottom.