(Kitco News) - Many investors are kicking themselves for missing out on gold’s seven-day rally that pushed prices to record highs above $2,200 an ounce; however, one market analyst said that the one thing investors shouldn’t do is chase the market at current levels.
In an interview with Kitco News, Carley Garner, co-founder of the brokerage firm DeCarley Trading, said that she expects investors will get another chance to take advantage of its new momentum.
“The nice thing about breakouts is they have a habit of retesting the breakout area. I Think gold is going much higher; my weekly charts and monthly charts are telling me somewhere around $2,600, maybe even a little more than that,” she said.
“But at some point, we may retest 2100, maybe even 2050,” she added. “Gold is really tough because of the way it trades. It will literally trade sideways for four years like we just did, and then when nobody's watching it and no one's expecting it, it rallies. Gold and silver are the markets that invented the FOMO trade.”
Carley’s bullish outlook comes as gold prices pause after its seven-day rally. April gold futures last traded at $2,184.10 an ounce, roughly unchanged on the day.
Carley added that a correction wouldn’t change gold’s trajectory. Although gold has made an unprecedented move to record highs, Carley said there is still a lot of money on the sidelines waiting for the right opportunity. She pointed out that even with this latest rally, gold is still undervalued compared to the S&P 500 and tech stocks like NVIDIA Corp (Nasdaq: NVDA).
“It's almost like, gold and silver saw what was going on in Bitcoin and NVIDIA and said, ‘hold my beer.’ Now it's Gold's turn. There's a lot of COVID cash out there that is still working its way through the system. We're not done with all that liquidity.”
Carley said it’s not surprising gold has hit record highs as the S&P 500 also trades at all-time highs. She added that in this environment, investors are looking for safe-haven assets.
“I wouldn't want to be a buyer of stocks. I know they're going up, but I'm seeing some really big red flags waving,” she said. “But you still have an opportunity to buy gold at a reasonable price. This market hasn't done anything yet.”
Carley said now that investors know what gold can do when it finds its legs, investors will be taking more of an interest in it to protect their portfolio.
“Everyone’s be talking about rising inflation and geopolitical risks. We have all these things going on and gold just could not get out of its own way. Well, guess what? Gold is finally starting to react. These risks are only going to grow. But Now people are going to say, wait a minute, we need some protection, so gold still has some catching up to do.”
