Filograph
Gold could continue its upwards trajectory, according to Roth MKM analysts.
Gold (XAUUSD:CUR) has had an uptrend over the past two months, rallying more than 13% year-to-date, compared to the S&P 500 (SP500) rallying 9.1% year-to-date.
Roth MKM analysts are setting a price target around the $2,500-2,600 range, representing about7.5-11.5% upside from Friday’s close, according to a Roth MKM Technical Strategy.
“Price is overbought in the very near term, but we have found periods of strong overbought conditions usually mean this metal is in a bull market,” wrote Analyst JC O’Hara.
He wrote that gold (XAUUSD:CUR) has been in a “true bull market” from 2005 until early 2012. Then, it was followed by a bear market. In 2015, the price of spot gold reached a low of $1,049.60 per ounce on Dec. 17.
This “ultimately led to a bearish to bullish reversal [following] a period of multi-year consolidation,” said O’Hara. So, “the longer-term picture shows this metal is capable of longer-term runs.”
Analysts see gold (XAUUSD:CUR) in a positive signal since Oct. 20, and “while in the very near-term price is becoming stretched from trend, risking a mean reversion move lower, we find historically periods of strong trend continue for long periods of time.”
The metal is currently 17% stretched above its 200-day moving average.
In addition, gold (XAUUSD:CUR) has outperformed other commodities.
According to Bloomberg, its Precious Metal Index recently broke out of a multi-year consolidation pattern, sitting 25% below its 2011 peak, which could mean there is “plenty of upside left.”