(Kitco News, Fri. Dec. 2nd, 2022) – The gold market has started December on a strong note with prices hitting their highest level since mid-August as prices push above $1,800 an ounce. Although the precious metal needs to reach another significant milestone, one analyst says there is substantial bullish potential brewing in the marketplace.
In a recent interview with Kitco News, Julia Cordova, founder of Cordovatrades.com, said that she is starting to turn long-term bullish on the precious metal after the price bounced off its lows below $1,640 an ounce in the last three consecutive months.
She added that on the Monthly chart, the price action is forming a significant long-term bull flag.
“My key target right now is $1,850. My first goal would be for gold to close there by the end of December,” she said. “Ultimately, if gold can get back above $1,913 and close there on a monthly basis, I have a long-term technical target all the way to $2,750.”
Not only is the technical picture supporting long-term gold prices, but Cordova said that the precious metal has some solid fundamental support whether the U.S. economy falls into a recession or not.
Although Cordova doesn’t pay much attention to fundamental drivers, she said that a recession would support gold as investors look to preserve their wealth. At the same time, even if the U.S. economy can achieve a soft landing, the yellow metal remains attractive as an inflation hedge.
“Gold prices can certainly go down in the short-term, but I do see this dual long-term potential building.”
Although Cordova sees bullish potential for gold, she added that it is essential to wait for the proper breakout: the monthly move above $1,850 an ounce.
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“I see that level as an important inflection point,” she said. “A move there puts gold on the radar for a long-term move.”
Outside of gold, Cordova said that she sees more immediate technical potential in the mining sector and is long the VanEck Gold Miners ETF (NYSE: GDX). She noted that in mid-October, GDX closed above its nine-week moving average for the first time in six months.
“That was a big deal,” she said. “Ever since it has been on an upward trajectory and when we crossed the 20-week [moving average], we’ve seen an even bigger upswing,” she said.
Gold’s current rally is generating some momentum for the senior producer ETF; however, Cordova said there could be some strong resistance just above $30 as this area represents the 50-week moving average.
Looking at silver, Cordova said the precious metal still has some upside potential even after rallying 16% in November. She said that she sees silver prices eventually pushing to $24 an ounce in the near term.
Posted by:
Jack Dempsey, President
401 Gold Consultants LLC
jdemp2003@gmail.com