In early July gold had already recovered some of its losses when increasing geopolitical instability pushed it up $80 per ounce in two weeks.
With Iran refusing to abandon its nuclear aspirations, North Korea test firing intercontinental ballistic missiles, and Israel bombing the Beirut Airport while militants fired missiles into northern Israel, gold is back on the bull after a major correction.
John Welsh, SVP of Peregrine Financial Group Inc., isn’t convinced the bull is back despite recent strength. “I don’t expect the U.S. dollar to collapse,” Welsh adds. He pegs the high for October gold at $685 with a low of $590.
Fain Shaffer, president of Infinity Trading, says gold is responding to multiple factors and could hit $750. Besides wars, China announced it will quintuple its gold reserves. “The big thing that really made it run was the verbiage in the fed statement that we may be close to an end of interest rate raises,” Shaffer says.
Shaffer notes gold tanked to $550 then recovered to break above the 20-day moving average of $600, which he calls the new support level. It will now test $730 or $732. “We may make a double top and start coming down.”