In the first three months of 2014, the gold price made a nice comeback with a little ride of 15 percent to the upside, and it seems that there is more in the pipeline. Once again it is impossible to hide from the stream of optimistic forecasts regarding the gold price as a consequence.
It appears that investing in gold is fashionable again after a year that was one of the worst years in the history of gold. That means that investors are also looking for forecasts as they want to know what they can expect. In short: they want to know how high the thing can go.
Keith McCullough from Hedgeye Risk Management was asked that question and he did not hide his optimism whatsoever. Gold’s technicals look very strong, according to McCullough, which means that higher gold prices are surely in the cards. He also believes it will not take very long for these higher gold prices to show up.
Gold’s Technicals Looking Strong
Keith McCullough started buying gold back in January again, based on technical analysis. He spotted a technical formation on the gold chart which he had seen a few years back as well, right before gold embarked on an impressive bull run. Very promising!
At the start of 2011, there were indeed two factors that sent the gold price to greater heights; a weaker dollar and a drop in interest rates. The combination of both aspects could have been interpreted as a sign of the US economy slowing down, which naturally impacts gold positively.
The same is happening now. The dollar has become weaker in comparison to the euro again and interest rates in the US are definitely not on the rise. The return for the benchmark 10-year Treasury broke the 3 percent level a few months ago, but was called back almost immediately. If we can believe Keith McCullough, gold is ready to rumble.
