Gold's Bear Market Will Only Be Over When This Level Is Breached - Strategist
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(Kitco News) - The gold bear market is still weighing prices down, but once gold breaches the $1,380 level, the metal will really take off, according to one strategist.
“We’ve been in this bear market since 2011. The worst of the bear market took place in the early years. In the last three years, [gold] has been trading in a very wide sideways range,” Miller Tabak managing director and equity strategist Matt Maley told CNBC on Wednesday. “But we are now getting up towards the top of that.”
The key level for gold to breach is its multi-year cap of $1,380 an ounce, noted Maley.
“[Gold] has broken above its trend line. That’s very positive. But, we are going to need to break the key level of $1,380, which has been the top in prices in 2014, 2016, and 2018,” he said.
This $1,380 cap has created a barrier, which when breached, will trigger a significant rally, according to the strategist.
“Whenever you get multiple touches over several different years and you finally get above that level, it really takes off. It confirms that long-term trade has changed. It is looking pretty good right now. Barrick Gold already started to do that.”
"With rates this low, [safe havens] might shift to gold now when you do feel some nervousness with what's going on in the global equities markets" - ETF fund manager -https://t.co/RceOIqsVml@DanielaCambone #Direxion #gold #platinum #palladium #dollar #Fed— Kitco NEWS (@KitcoNewsNOW) March 28, 2019
After hitting four-week highs on Monday, gold prices tumbled below the $1,300 level on Thursday, dragged down by stronger U.S. dollar.
“Gold prices suffered strong double-digit losses and hit a three-week low today … The precious metals bulls are fading fast late this week amid a resurgent U.S. dollar index that is pushing toward its recent multi-month high,” wrote Kitco’s senior technical analyst Jim Wyckoff.
April Comex gold futures were last trading at $1,290.80, up 0.08% on the day.