Gold prices ended last week at $1,515.50 per ounce, pulling back from a double top that formed around $1,565.00 per ounce. However, prices have not broken down through the trend support line. This suggests a consolidation, which could be followed by a resumption of the overall upward trend (see the following chart).
Some major investors and mining industry leaders continue to be as bullish as ever on gold. Billionaire Frank Giustra, CEO of Leagold Mining Corporation, believes gold could reach $1,900 in the next few months with the right conditions, reports Yahoo Finance. Giustra told Kitco News last week, “I think we’re in the third and final phase of the gold market that’s started in 2001, and this will be the most explosive phase for gold.”
All of the significant factors that contributed to this latest surge in gold prices back in June are still in play. Because of this, now may be a good time for investors to increase their allocation to gold.
For more information about the value of holding gold in an investment portfolio, please read Flexible Plan’s research white paper available here.
Rick Andrews is president of Avant Capital Management.