With precious metals recently breaking out to their best levels in over six months, several analysts have begun to forecast new highs for gold and silver as the rally continues.
Tom Fitzpatrick, a technical analyst at Citigroup, stated in an interview with King World News on Tuesday that he expects the price of gold to reach $2,055 per ounce and silver to hit $50 per ounce in the next stretch of the precious metals bull market.
“You can still have corrections and track sideways occasionally, but to us the trend is solid,” Fitzpatrick noted. “The pattern is quite clear, and we still believe this $1,791 area is really quite critical in terms of the next leg higher for gold, as well as the $37.48 level on silver.”
He went on to say that “When we get a weekly close through both of those critical levels, we anticipate that will give us an acceleration which will take us up toward the targets on gold to the $2,055 area, and silver back to the old highs near $50. However, on a longer-term basis we believe we have a setup here which suggests that gold could continue to go higher for some time to come.”
The Citigroup analyst added that “We’ve always been of the view, and are still of the view that gold is first and foremost a hard currency more so than it is a commodity. So the building blocks are there for gold to continue to go higher, not just against the dollar but against all of the other paper currencies as well…Given the dynamics that we have in the background, the similarities that we to the 70s, we would argue the combination of the similarities, and the major difference which is the money printing being exercised by all of the developed world’s central banks, we can see gold continue to follow a trend equal in magnitude to what we saw in the 70s.”
“Ignoring the final move, which was caused by a Russian invasion of Afghanistan, we need to get to $3,400 just to replicate the core move seen in the 70s,” he continued. “We don’t see that, at the end of the day, as a particularly aggressive call.”
If gold is able to reach $3,400 per ounce, Fitzpatrick contended that “It is not inconceivable that we may see silver closer to $100.”
He concluded by noting that “Investors have to remember that at the end of the 70s the gold price doubled in a mere five or six weeks. If three to five years down the line we see that the base policy of the developed world is to continue printing money, then the gloves are off in terms of what levels gold and silver could actually go to.”