Gold Will Be At These Levels In The 2nd Quarter!

With Bank of America analysts setting an initial price target of over $2,100, it may only be a matter of time before gold prices hit record highs.

A two-year bull run for gold could be starting

Gold’s underlying prospects look strong as inflation remains persistently high and economic concerns continue to escalate amid labor market weakness, tightening liquidity and “fragile” credit markets, America’s second-largest bank said in a report on Wednesday.

cryptocoin.comAccording to analysts, the technical outlook for gold also points to bullishness. The lead author of the report, Bank of America (BofA) technical strategist Paul Ciana, notes that the breakout movements of gold and silver are encouraging the precious metals market. Ciana adds that gold’s rise to an all-time high of $2,078 could mark the start of a two-year bull run that could push prices above $2,500. However, he states that in the current environment his initial target is above $2,100. The strategist details his views with the following technical data:

The daily chart of gold prices shows a bullish continuation pattern called the pennant (a small triangle). This pattern was confirmed when it broke above $2,000 on April 4, 2023. The technical theory suggests that this pattern is formed in the middle of the trend and thus the next leg of the uptrend starts upwards in 2023 until 2078, 2118 and possibly 2195.

This could signal a correction for gold!

The bullish outlook comes as gold prices cling to Tuesday’s breakout gains. Gold futures for June delivery last traded at $2,038.80 and were relatively flat throughout the day.

Paul Ciana adds that while gold is in an uptrend, there is a risk that the market will be seen as ‘overbought’ as it rushes to $2,078. He states that if the daily Relative Strength Index (RSI), a momentum indicator, exceeds 70 points, it could signal a consolidation move or correction for gold.

What does it take for gold to stay in an uptrend?

On the downside, the strategist says gold remains in an uptrend as long as support holds at $1,938. In addition to the bullish outlook for gold, Ciana notes that the precious metal has consistently reached record highs against the Japanese yen since mid-2022 and is on track to meet its long-term price targets of Yen 285,000. Meanwhile, it may only be a matter of time before gold reaches 2,000 euros per ounce. Ciana comments:

A bull flag formation formed in 2021 supported a long-term uptrend towards $2,200. Gold/Euro should rise above 1.902 to avoid double top risk.

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