Here's Why Louise Yamada Says Gold's Going To Break Out
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(Kitco News) - â€śYou do have enough here to argue that gold can go higher.â€ť
These were the words of veteran technical analyst Louise Yamada as she appeared on CNBCâ€™s Futures Now Tuesday, when the metal rallied to levels last seen right after the U.S. presidential election last year.
Indeed, there are many factors working in goldâ€™s favor right now.
For one, North Korea launched a missile over Japanâ€™s airspace overnight, which pushed gold prices to multi-month highs. Likewise, the U.S. dollar is under pressure and investors continue to question the Federal Reserveâ€™s ability to tighten monetary policy as well as President Trumpâ€™s reform plans â€“ more positives for gold.
But whatâ€™s really catching Yamadaâ€™s attention are equity markets, which she said look â€śfragile.â€ť
â€śWhatâ€™s interesting about todayâ€™s action is that [gold]â€™s moving inversely to the [stock] market,â€ť the managing director of Louise Yamada Technical Research Advisors said.
â€śIf gold continues up here, itâ€™s possible that we move more into a bit of a corrective trend in equities. Thereâ€™s a lot here suggesting that equities are looking fragile under the surface and it would be logical to see equities pull back a little as we get a rally in gold.â€ť
Stock markets were under pressure as gold prices broke out Tuesday. However, after clocking in an 11-month high, the metal has cooled off as equity markets recovered. December Comex gold futures lost recent daily gains and were heading towards a negative close, last at $1,312.10 an ounce, down 0.24% on the day. Meanwhile, the Dow Industrial Average and the S&P 500 moved in the green, last at 21,861.26 and 2,448.01, respectively.
However, the former Citigroup analyst isnâ€™t giving up on gold just yet, noting that the metal is now â€śbreaking out.â€ť
â€śI think that gold can go higher. It could possibly get to the next level at $1,380,â€ť she said. â€ś$1,400 would be key resistance because that goes all the way back to 2014.â€ť