The 10-month high of Gold is only the beginning – Analysts

(Kitco News) – According to some economists, the new peak of the last 10 months in the gold market could well mark the beginning of a new uptrend for the precious metal.

With renewed momentum in the precious metals market, some analysts have said it can not be a matter of time before prices exceed the highs of the previous year, around $ 1,365. ounce. Many analysts have noted that gold will continue to benefit from the revival of the US dollar in a context of increasing economic uncertainty and low interest rates.

The gold futures on April traded for the last time at $ 1,339.40 an ounce, up 1.30% on the day. So far this year, gold prices have risen more than 4%. At the same time, the US dollar index is relatively unchanged on the day and year, with the last trading price being 96.73 points.

"Gold is again surpassing its previous peak in an extremely favorable technical and fundamental environment," said Bill Baruch, president of Blue Line Futures, in a note addressed to customers. "We think there is a significant upside given the fact that the dollar is at the top of its range."

Joshua Mahony, a market analyst at IG, said in a note that the latest breakthrough in gold could ultimately drive prices up to $ 1,375 an ounce with initial resistance. $ 1,357. He added that the price of gold should be reduced to below $ 1,323 to neutralize the current rally.

Christopher Vecchio, chief currency strategist at DailyFX.com, said he saw an initial gold resistance at $ 1,348 an ounce, which represented the range of consolidation for the first two weeks of the month.

"Gold prices continue to rise in an environment of heightened political uncertainty in the eurozone, the United Kingdom and the United States," he said.

David Madden also believes that the price of gold could still rise by almost 1%. However, he said he expected any recovery to rise, as he does not expect a significant weakness in the US dollar.

"Commodities have been on the rise since mid-November and, if they continued, they could test the $ 1,350 area again," he said in a note to the client.

Commodity analysts have been turning more to gold since last month, after the US Federal Reserve announced it would suspend its interest rate hike in the foreseeable future. Analysts have noted that a "patient" US central bank will keep real interest rates low and offer less wind down for the US dollar. Economists have also said that growing economic risks and the growing fear of a global recession would also keep pressure on the stock markets.