Ross Norman: Gold Poised – $1,291 Is a Game Changer

Gold is poised to crack the critically important $1291 level which is a trend line going to back to the all time high on September 22nd 2011 when gold hit $1922 an ounce.
Conclusively breaching this trend line is to say we are very much back in a bull run. With $1291 breached there would only be the minor inconvenience of the psychologically important $1300 level – more of a speed bump than a real resistance level – before gold is able to move higher largely unfettered. See chart below.
Since 2000 gold has notched up an average of a 11% year-on-year gain compounded – that is four times a UK property, double a London property and three times what the Dow Jones Index has achieved. And yet it remains a minority sport … arguably the best kept secret in financial markets (we are less than 0.5% of global assets under management).
2017 looks likely to achieve well north of the run rate of 11% and Sharps Pixley has forecasted an average for the year at $1310 … a 15% gain … and we may well have under-estimated the potential. With the Relative Strength Indicator at only 65, there is still plenty of scope for buying in gold before we achieve “overbought” status. Going into a long weekend and with legions of potential black swans out there, this is no time to be short gold and we would not be surprised to see short-covering later today.

This post was published at Sharps Pixley