BoA Analyst: Gold Going To $1,300 In May
Gold has increased for five straight days and is now positive for the year 2015. According to one top financial technician, who works at Bank of America, the rally has just begun.
On Tuesday’s “Futures Now,” Bank of America Merrill Lynch’s head of global technical analysis, MacNeil Curry, argued that, in the near-term, we’d likely see a “correction” in the dollar over the “next couple of weeks,” coupled with falling yields on Treasurys, all of which could lay the groundwork for a sustained and sizable rally in gold that could see it over $1,300 by the end of May.
“Rates are headed lower, and the dollar is likely to remain in a corrective sequence in general,” Curry said on the show. “Gold should rally in that environment.”
According to Curry’s chart analysis, gold’s “sizable corrective phase” since November 2014 is coming to an end and the precious metal is firming. Further, Curry demonstrates that gold’s inverse relationship to the dollar has changed, which he sees as another bullish sign for bullion.
“Gold has been on its own, really, since November,” Curry said. He submits that in November, gold “went from $1,132 up to $1,307 and throughout that time, the dollar index actually rose from about 87.5 to almost 95.”
“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,” Curry said.
Curry is now watching the 200-day moving average, which is approximately $1,238 per ounce. Beyond that, he seems bulliong increasing in May.
“If you look at the price action,” he said, “it says gold should probably resume higher.