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If gold can close Dec. above $1,850 it can go to $2,750 says technical analyst

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(Kitco News) – 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.

“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.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.


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