The gold market is seeing strong buying activity following last week’s record closing price. The precious metal climbed above $2,100. Moreover, according to a market analyst, he still has places to go.
The techniques are very good, gold prices are going to these levels!
cryptokoin.comAs you follow from , gold prices suddenly skyrocketed. The shiny metal also surpassed the $2,100 level after consolidating at $2,000. The question now is whether there is a basis for this rise. Jess Felder, founder of the Felder Report, says he expects gold to break upward as price action creates some bullish technical formations. In this context, the analyst points to the following levels:
Gold forms consistent ‘bull flag formations’. The price rises, consolidates for a while, and then we see another price rise. Gold has been wanting to rise higher for a while. From a purely technical perspective, it seems to me that there is a few hundred dollars higher target for gold in the short term. But longer term, we’re looking at $2,700, $2,800 maybe in the next year or two. Technically, gold looks very, very good.
So, the yellow metal has a solid basic look!
Aside from gold’s technical outlook, Felder says the precious metal has a solid fundamental outlook as he doesn’t expect the Federal Reserve to be able to reduce inflation to its 2% target. Felder notes that persistently high inflation will cause investors to lose faith in the Fed. He adds that this will weaken the US dollar and make gold an attractive asset. At the same time, Fleder notes that a weakening economy would force the Fed to at least restart quantitative easing while maintaining restrictive monetary policy. In this regard, the analyst makes the following statement:
If these two situations happen simultaneously, this would be the ultimate bull case for gold. If it turns out that the Fed isn’t doing enough to sustainably lower inflation, that will make people worry that way. The whole soft landing rhetoric is based on the idea that inflation will fall so the Fed can cut rates without causing a recession. However, if inflation does not fall and they cannot lower interest rates, this will affect the economy.
As good as gold looks, miners look even better
Felder also notes that credit conditions in global financial markets continue to deteriorate. He adds that sooner or later the Fed will have to pump more liquidity into the market.
It’s not just precious metals that look good. Felder says he is extremely bullish on precious metal miners. Because he states that this sector has never been this battered since the bear market bottoms of 2015. However, Felder points out that the negative sentiment is not compatible with the solid foundations of the industry. In this context, Felder makes the following statement:
To me, this is a very strong signal of sentiment; It shows that there is as much bearishness as investors can take. This is a complete irony: miners are trading as if gold is in a major bear market. However, gold prices remain close to record levels.
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