General | Feb 05 2006
The world is once again being consumed by gold fever. At least the financial world as we know it. All traders and brokers are talking about these days, especially the punters among them, is gold, gold, gold. And uranium, but we’ll save that for another story.
Gold at US$2000 an ounce? It may seem like a crazy idea, but people are talking about it like it is a surefire thing to happen in the not too distant future. The bulls are leading and lemmings are following, no doubt.
For the medium term, however, it would look like the metal is preparing itself for a surge to US$600/oz, and beyond.
Technical analysis supports the view.
At Barclays Capital, technical analysts could hardly agree more. They report this morning their weekly patterns/Elliott wave counts (of price movements on their charts) suggest there are still “higher highs” ahead for gold “with the market set to trend well above 600 in the months ahead”.
Well above? Well, that’s what it says.
The Barclays specialists believe that once gold has surpassed the upcoming “psychologically important number” its next price target is likely to be US$621/oz as this equates to a 61.8% Fibo (short for Fibonacci) retracement of the metal’s price fall between 1980 and 1999 (US$850 to US$252).
Meanwhile, it would seem like equity investors are already accounting for the metal’s next move upwards, with Barclays noting shares of gold producers and explorers have been outperforming the metal lately.
