From the desk of Steve Strazza @Sstrazza
In last week’s Chart of the Week, we wrote about our bullish outlook on Gold and followed it up with a deep dive on the entire Precious Metals space, which included a number of trade ideas to express our thesis. This week, we have a table that helps provide a different perspective on its recent price action but arrives at the same bullish conclusion.
The shiny metal has gotten a lot of attention lately as it currently sits around its highest level in seven years.
After about a 9% surge off of this month’s lows, we’d expect prices to consolidate in the near-term. But after that, we’re betting on new all-time highs for Gold in the coming quarters as long as prices are above last year’s highs near 1,560. Here’s how we see it.
Click on chart to enlarge view.
A move back to all-time highs may seem like a lot of work for the shiny metal, but let’s put things in context by analyzing how it has fared in other currencies of late. The table below shows Gold’s performance in 18 of the world’s most important currencies.
Click on table to enlarge view.
The data speaks for itself. Earlier this week, Gold made a new all-time high in 14 of the 18 currencies. It registered a fresh multi-year high in every currency and has an average trailing 12-month return of 30%.
Along with the Swiss Franc, Hong Kong Dollar and Chinese Yuan, the US Dollar is among just four currencies in which the price of Gold has yet to eclipse its record highs made almost a decade ago.
Given the relentless strength for the metal globally, a 16% move back towards 2011’s highs for Gold in US Dollars seems to be the next logical move if it manages to stay above 1,560.
Thanks for reading and please let us know if you have any questions!