As 2014 quickly comes to a close, analysts and strategists speculate on whether or not the gold bull market will see a revival in the new year. Wells Fargo, thinks no, pointing to low inflation and a strong dollar that doesn’t show signs of slowing down anytime soon. “We expect higher U.S. interest rates and continued low 2015 inflation, and these historically have predicted lower prices,” the report said.
But other traders aren’t so pessimistic, like gold bug George Gero of RBC Capital Markets. In an interview, Gero told CNBC that the bullion trade is set to turn around in 2015, saying: “For the next year I’m looking at 1300 to 1400 as a closing price one year from now.”
Jordan Roy-Byrne, CMT, editor and publisher of The Daily Gold Premium, agrees with Gero, using his knowledge of gold’s history to argue that the bottom for gold is no more than a couple months away.
When asked why he think we are so close to bottoming out, Roy-Byrne responded:
Typically, markets don’t bottom at random numbers. Gold has really strong support at $1,080/oz, which is the 50% retracement of the entire bull market, and at $1,000/oz, which is the key psychological level and also was a key support level in 2008-2010, so gold is more likely to test those levels than bottom at $1,137/oz.
Check out the full story at SeekingAlpha.com