Chris Vermeulen of TheTechnicalTraders.com expects to see some selling and consolidation if gold makes it to the US$2,000 per ounce level.
Gold has been on a tear this past week, rising from around US$1,800 per ounce to over US$1,970.
The yellow metal’s swift increase has taken it through the crucial US$1,900 level and past its previous all-time high of around US$1,920, set in 2011.
But is gold’s ascent sustainable from a technical standpoint? According to Chris Vermeulen, chief market strategist at TheTechnicalTraders.com, the answer is “yes.”
“Gold has got a beautiful pattern. It broke out of a multi-year basing formation last year, last July. So we’re going on one year that gold broke out, and it’s been rallying more or less ever since, other than the COVID blip where there was forced liquidation, margin calls,” he told the Investing News Network.
“From a technical standpoint, it actually still has more room to grow. I think we are going to see US$1,967, around the US$2,000 mark,” Vermeulen continued. “Based on the power and the momentum behind this rally, it says we should reach around that US$2,000 mark.”
He emphasized that US$2,000 is both a technical resistance area, but also a “mental whole number.” That means there will likely be some selling and consolidation if gold makes it to that level.
“(That’s) perfectly fine,” Vermeulen said. “We don’t really want prices to go straight up — as good as its sounds, when something goes straight up, it typically comes straight back down for at least half of the move. So the slower it goes up, the more it can be sustainable.”
He also touched on silver, saying that if the white metal can not only break above US$24.36 per ounce, but also hold there for a day or a week, the next target is US$34.
“It’s going to be a pretty big jump, and as the price starts to move higher, the jumps actually get bigger and bigger,” Vermeulen explained. He expects the metal to test its 2011 high within the next 12 months, and triple digit silver is likely in the cards after that.
Watch the interview above for more from Vermeulen on gold, silver and technical analysis.
Don’t forget to follow us @INN_Resource for real-time updates!
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.