TECHNICAL ANALYSIS of chart patterns in the Gold Price show the metal will rise to $1300 per ounce shortly, and may rise to $1500 by the end of 2010.
Quoted by Bloomberg News, Michael Macdonald of Credit Suisse says the Gold Price would rise a further 19% before investors consider it a "bubble".
"The trend is quite dominant and well-defined, as the momentum is strong and the RSI is trending higher," says Macdonald – based in Singapore – citing the 14-day relative strength index in Gold Prices.
Relative strength compares gains and losses on a weekly basis. Gold's RSI rose to a one-month high above 69 at the end of last week. Bloomberg says that technical analysts typically see 70 or above as a signal of short-term weakness ahead.
"If gold hits $1500 by the end of the year, it will create a bubble scenario and that could be a bit panicky," says Macdonald.
But "We would expect a pullback to be less severe than the previous pullback," says the latest Fortis Nederlands Bank Metals Monthly from London consultancy the VM Group today, pointing to when gold dropped from $1250 to $1170.
"The Gold Futures market remains well placed to support a higher Gold Price," the analysts write, pointing to a lower-than-expected speculative position from non-industry players in the derivatives market.
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