“I think we could see US$2,200, US$2,400 sooner than people think,” said Chris Vermeulen of TheTechnicalTraders.com.
Gold is down from its summer high point of more than US$2,000 per ounce, but Chris Vermeulen of TheTechnicalTraders.com believes the pullback is healthy.
“It’s been pulling back in a very controlled technical pattern known as a bull flag. Bull flags are a continuation pattern — you’re expecting a move of equal size continuing higher from this pattern,” he explained to the Investing News Network in an interview.
“We’ve got a really nice move on this chart. I think we could see US$2,200, US$2,400 sooner than people think. This pattern is just on the cusp of breaking out this week.”
Vermeulen, who uses technical data to guide his views on the market, also emphasized that like the yellow metal, gold stocks are positively positioned right now.
“When we’re looking at the gold miners … they have formed a multi-year basing formation, and they broke into a bull market a couple of months ago,” he said. “This is their first pause or pullback. And the first pause of a new trend can be bought — it’s really just the first opportunity to back the truck up and get your position before it starts to really take off.”
“If silver can break here and start to run, US$36 is the next stop. And then it falls into US$52, which would be an incredible target. But US$36, US$34 is a conservative yet exciting upside target to look for.”
He concluded, “That’s where we are with gold, silver and miners. They all have the same pattern, which is a bull flag, and it points to dramatically higher prices in the very near term.”
Watch the interview above for more from Vermeulen on gold, silver and the overall market.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.