'Gold rally got a little carried away' - DeCarley Trading
The gold market is struggling to find consistent momentum, and it may be time for the red-hot metal to cool down, according to Carley Garner, co-founder of DeCarley Trading.
Garner said that after gold's run, which saw prices hit a 7.5-year high last month, a correction would be healthy. Although Garner sees the possibility of gold testing resistance at $1,650 an ounce, she said that she is optimistic prices can move higher later in the year.
"As long as that area holds, I think golds got a good shot at it, running back up," she said. "Assuming those levels hold, as I expect them to, I'm thinking somewhere in the $1,800, to $1,850 area."
She added that gold prices could start a new run higher after the seasonally slower summer period and that she would be looking at a new rally by the fall.
Along with gold, Garner said that she is also bullish on silver as the gold-silver ratio remains well extended above 100 points. The current ratio shows that it takes more than 100 ounces of silver to equal the price of one ounce of gold. The historical average for the ratio is around 60.
Garner described the current ratio as "dramatic."
"When you see that sort of thing, it's very supportive for silver," she said.
Garner said that she is looking for silver prices to hold support around $14 an ounce and then take a run back to $20 or $21 ounce.
"There's still some gold bugs out there who might be willing to give silver a shot, so I think that'll be at least somewhat supportive despite the manufacturing fundamentals," she said.