Since December, gold has rallied more than $100 per ounce, breaking its all time high of $873 from 1980 and surpassing $900 on Jan. 11. “The big drivers here, and it’s the same old story, are the dollar and crude,” says Charlie Nedoss, senior account manager for Peak Trading Group. With the dollar having done its dead-cat bounce and crude trading near $100 per barrel, he says gold’s long-term trend is up. So much so that he is trading with the trend on outside days: buying at the top and laying stops just under the previous day’s close, a deeply risky strategy but one that is highly profitable. For February, he says support is $841 with upside potential at $925.
“There are a handful of supporting factors and the market cherry picks which one matches the bullishness for the day,” observes Tom Hartmann, broker analyst for Altavest Worldwide Trading Inc. From the optimistic commodity side, buyers want it for jewelry and electronics, for the pessimists, gold is attractive as a hedge against high oil prices, a weak dollar, inflation and insecurity. He says initial support is at $900, $850 on a deep correction, and could trade as high as $925.