Kicking off historic bull run: 'Look for new record highs above $1,921' — Credit Suisse
(Kitco News) The comparisons between today's gold price action and that of 2008 are gaining popularity with Credit Suisse now expecting the COVID-19 crisis to eventually push gold to new record highs of above $1,921 an ounce.
“We remain major long term Gold bulls, with the market encouragingly back above its 200-day average having held above key support at $1,452/1,446,” Credit Suisse said in a note last week. “We still look for new record highs above $1,921.”
During the 2008 financial crisis, gold first saw a sharp sell-off, but following the intervention from the Federal Reserve, the precious metal eventually began to rise, kicking off a historic bull run.
“It's important to note that Real Yields have stopped rising and we still believe a similar dynamic will play out to 2009 when after a sharp initial correction in 2008, gold eventually went on to make new all-time record highs,” Credit Suisse said.
From the technical perspective, gold’s initial resistance is currently above $1,700 an ounce while support is at around $1,450, the note pointed out.
“Resistances above $1,700/05 are eventually seen at $1,734, the 78.6% retracement of the 2011/15 down move, then the $1,796/1,803 corrective highs from 2011/12,” Credit Suisse said. “Key support remains at $1,452/46, below which now completes a top to suggest a much-protracted correction, with the next support at $1,374/48.”