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General Precious Metals
Gold market has room to run higher as prices push back above $1,800 - analysts
(Kitco News) - Gold prices have popped back above $1,800 an ounce, and according to some analysts the market appears to have some staying power.
Last week after pushing to its highest level since 2011, the gold market was met with some expected technical selling pressure and profit taking; however, one key theme analysts have been highlighting is that in a world awash with economic uncertainty, investors have been aggressively buying dips in precious metals markets.
August gold futures last traded at $1,808.80 an ounce, up 0.85% on the day.
“You just can’t ignore the support for gold,” said Kevin Grady president of Phoenix Futures and Options. “Every time the market selloffs we are starting buyers step in.”
Grady added that it’s not surprising to see investors strategically jump into the market as they look for hedges against rising inflation and market uncertainty.
“In this environment, I think investors will become a lot more aggressive in gold, and by the end of the summer we could see prices above $1,900,” he said.
Jim Wyckoff, senior technical analyst at Kitco.com, said that even if gold prices continue to trade around $1,800 for a while, this price level is sustainable in the long term.
George Gero, managing director at RBC Wealth Management, said that because of all the market uncertainty he thinks gold has enough momentum to push to $1,850 an ounce before seeing significant selling pressure.
He added that this latest push to a new nine-year high feels a lot more sustainable as the move is backed with bullish technical indicators.
“It doesn’t matter where you look, we are seeing higher volume, higher open interest, higher closes and higher moving averages,” he said.
Jasper Lawler, head of research at London Capital Group also said that he thinks gold has enough room to run to $1,850 an ounce before seeing major selling pressure.
He added that it is difficult to be bearish on gold when central banks continue pump liquidity into financial markets.
Although Lawler is bullish on gold, he said that he doesn’t expect prices to shoot higher anytime soon. He said that he sees the market “meandering” to $1,850 as inflation concerns start to dominate investor sentiment.