Gold closed the week at $1,281 per ounce after bouncing back from a double bottom at the 200-day moving average (see the following chart).
An opportunity to buy gold near the historic support level of the 200-day moving average remains. Buying here and then again when it crosses the 100-day moving average, and then once more when it crosses the 50-day moving average, may be a wise strategy.
The formation of the double bottom here lays the foundation for a strong move upward later this year. After gold gets through its traditionally weak summer period, with June historically one of its worst months, the stage is set for a rally in the fall.
Taki Tsaklanos, founding author at financial analysis provider Investing Haven, told Barron’s that “at less than $1,300 … (he) considers gold a ‘bargain.’” Says Barron’s, “Tsaklanos expects ‘the gold market to build up energy during the summer.’ Any breakthrough, he predicts, ‘is likely going to happen in October or November, and it would pave the way to $1,550.’”
Rick Andrews is president of Avant Capital Management