BofA Makes The Case For $3,000 Gold
Everyone loves gold these days. Deutsche Bank sees
$2000 gold soon. And Citi says it could go
to $2500 in six months.
BofA, too: the firm recently initiated a $2,400
target price for the shiny yellow metal since the Fed’s announcement of
open-ended bond buying.However, BofA analyst Stephen Suttmeier thinks there’s a
case to be made that gold goes even higher than the bank’s official call.
In a note to clients today, Suttmeier
writes:
The secular bull case for
Gold $3000
We remain secular bulls on gold. Key
chart and uptrend supports between $1600 and $1400 have held and we have
viewed $1550-1500 as a good area to buy gold. The breakout above the
year-long downtrend line completes the correction within the longer-term uptrend
and targets resistances at $1800 and $1925. But, the secular bull market
for gold points to a stronger rally to $2050-2300 and up to $3000 longer-term.
The top of the rising channel from mid 2005 is near $2375 and reaches the $3000
area by early 2014. Key channel supports are in the $1600 and $1400
areas and rise ~$25/month. The chart above shows the secular bull market for
gold.
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