The Conversation (0)
“Gold has no resistance really all the way down to US$1,430, so it’s a bit precarious right now,” said Fulp at the Precious Metals Summit.
The gold price has made a strong move upward in the summer months, rising from below US$1,300 per ounce in May to over US$1,500 in August.
The yellow metal has for the most part continued to hold above that level in September, and its activity has sparked optimism in the gold space. However, Mercenary Geologist Mickey Fulp believes market participants need to remain cautious.
“We’ve never seen this happen during this period of time, and we have gold charts that date back to 1970 on an annual basis,” he said at the Precious Metals Summit in Beaver Creek, Colorado.
“This is unprecedented, this continuous move up. (The gold price has) really gone exponential (for) a whole variety of reasons,” he said. Lower interest rates worldwide, global geopolitical risk and central bank buying are just a few of the reasons he listed.
The problem, Fulp said, is that gold has risen too high, too fast.
“Financial instruments of any kind do not go exponential without having generally (to) go parabolic. What we want to see is a more orderly two steps forward, one step back kind of market where we establish periodic resistance. Gold has no resistance really all the way down to US$1,430, so it’s a bit precarious right now,” he explained.
In his opinion, gold needs to either hold steady at US$1,500 or correct back down to that US$1,430 level.
“I think it would be really healthy in the market if it would have a correction, even if it went back to US$1,430 — you don’t want it to go below that, but it needs to test some lower levels here before it goes on its next run up,” he said.
Listen to the interview above for more from Fulp on the gold market, including where stocks are at right now. Our full playlist for the Precious Metals Summit can be found on YouTube.
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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.
