Gold ended the week at $1,331 per ounce, as prices consolidated below the $1,340–$1,350 resistance level (see the following chart).

Gold has climbed 12% since August 2018, and many see the trend continuing. MarketWatch reports, “Gold analysts at Goldman Sachs think the metal will rally 4% to $1,375 an ounce by this summer, and around 8% to hit $1,425 an ounce a year from now.”

MarketWatch lists eight reasons to be bullish on gold:

  1. Declining bond yields.
  2. A weakening dollar.
  3. Central banks sucking up supply.
  4. Fear factor (protection against troubled times).
  5. A deal on trade (with China).
  6. “All you need is love” (gold jewelry sales).
  7. Supply shortages.
  8. Technical factors. Says MarketWatch, “Since gold fell in 2012–13, it has repeatedly bumped into resistance at $1,340-$1,350 an ounce. If it breaks through this level, it will be a bullish technical signal that could suggest it keeps going higher, says James Paulsen, chief investment strategist at The Leuthold Group.”

If gold does break through the resistance level at $1,350, then that resistance level will become the new support level, and Goldman Sachs’ projection would have a technical foundation.

Rick Andrews is president of Avant Capital Management.