Yep, that’s right $1,500 an ounce — although we must confess we don’t fully understand why.
See if you can make sense of Wednesday’s call from the Global Commodity Technical Strategy team at BarCap:
Gold has threatened to break above its 2008 high for many weeks now and finally managed to do so today. Having rallied “off the charts” we are left to resort to projections and extrapolated trendlines to forecast where the move might stop. Initial resistance is found in the 1050 area but that is way too conservative given the spring board that a wide 18-month range provides. We believe gold has significant upside potential into 2010 (channel resistance currently is at 1370; history suggests a run at 1500).
Taking it a step at a time, in the coming weeks, we view consolidation above 1020 as extremely positive, targeting 1050 initially and 1120. Hold long positions.
Here is the channel resistance (click to enlarge):
And if you want to get really technical here’s some more from Jordan Kotick, the global head of technical analysis at Bar Cap.
In line with our view, gold has broken higher and from an Elliott Wave perspective, we suspect the rally is wave 3 of 5, indicating an eventual push toward the 1120 area (Triangle measured move) and potentially beyond into year end. When compared against the major currencies on the charts below, it is clear that the gold rally is by no means unstoppable as none of the charts show prices concurrently pressing against their respective all-time highs; against sterling gold is making great strides, and against the euro it is breaking higher out of range, but against the yen it is holding in a well-defined range. These charts speak volumes: as much about currency perceptions as the value of gold.
The charts below (click to enlarge):
Meanwhile, this morning’s price action.
Related link:
Gold, ‘Off The Charts’, May Target $1,500: Technical Analysis – Bloomberg