Will gold price's next 'big move' soar to $2,400 or collapse to $1,600? - Chris Vermeulen
The short-term momentum for gold is skewed to the downside, and Chris Vermeulen, chief market strategist said that a support level of $1,810 could be tested before the next 'big move' upwards begins.
However, if prices continue to trend below $1,810 an ounce, gold could fall all the way to $1,600.
“If gold could tag the [$1,810 an ounce] level, that could be a very significant turning point,” Vermeulen said. “Ideally we hit that level because usually when you hit a measured moved you see a very sharp reversal off there. It’s going to be choppy.”
Vaccine news have been the main culprit putting pressure on the gold market for the past few weeks, Vermeulen noted.
“I think there’s enough fear today that when the average investor, trader goes home, they’re going to see it in the news and go ‘oh, my God gold’s tanking I’ve got to sell my positions’ so I think tomorrow we see the market probably gap lower or at least sell off for one more day as the masses exit in pure fear, and hopefully that will put a bottom at around $1,810,” he said.
Long-term, gold is set to break all-time highs again, to a target of $2,400 an ounce, Vermeulen said.
“I think there’s a lot of upside potential. Obviously, gold needs to turn around for that to happen, but this $1,800, $1,810 is really critical. If that’s broken, and it holds below there on a weekly basis, I would say we may have topped out here and it could go quite a bit lower back down to the $1,500 or $1,600 mark,” he said.