Gold, which has jumped 8 percent from its June 28 low, still has room for further gains, says Eric Wilkinson, co-founder of Blue Group Trading.
Technical and fundamental factors support an advance, he maintains.
On the technical side, gold has established support at $1,640 an ounce, and a definitive break above $1,660 would trigger a break to $1,700, Wilkinson tells Yahoo.
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
“Anything above $1,660, and it looks like we’re testing $1,700,” Wilkinson says.
And here’s where fundamentals come into play. “With the [Federal Reserve] in play talking about quantitative easing, I think they want a weaker dollar against the euro,” he says. “So I can easily see this market trading up into the $1,700s.
Part of what was pushing gold lower for most of the year was European central banks dumping gold to help pay down their debt.
"When you have countries like Portugal selling $500 million of their gold in a given year, that puts a tremendous amount of pressure on the downside,” Wilkinson said. “Now Europe is pretty much out of gold to sell.”
Many heavyweight investors share his bullishness. Among those who have built up their gold positions are Pimco, George Soros, John Paulson and Sprott Asset Management.
"I wouldn't be at all surprised to see a new record [for gold] this year," Sprott’s Chief Investment Officer Eric Sprott tells The Wall Street Journal.
Editor's Note: Economist Warns: ‘Money From Heaven a Path to Hell.’ See Evidence.
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