Gold finished Tuesday at a 2 1/2-week high of $1,194.10, rising for the fifth straight session after comments by Federal Reserve Vice Chairman Stanley Fischer fueled speculation that an interest rate hike won’t happen until September.
MacNeil Curry, head of global technical analysis at Bank of America Merrill Lynch, believes this is just the beginning of a big rally in gold.
Speaking on CNBC’s Futures Now (see video above), Curry said gold has been in a corrective phase since November of last year, and “within that corrective phase we’re looking for a move back up to the highs of $1,307.” He sees a correction in the U.S. dollar occurring over the next couple of weeks along with declining yields on treasuries, which sets up gold for a rally.
Curry also believes the traditionally inverse relationship between gold and the dollar is starting to break down, pointing out that in November gold went from $1,132 to $1,307 while the dollar index was rising. “The big thing here is that we’re going to see continued breakdown in the negative correlation between gold and the dollar over the course of the next couple of weeks,” he said.
Curry sees gold reaching $1,307 by May. “If you look at the price action, it says gold should probably resume higher.”
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