Gold enjoyed an incredible intraday spike on Thursday, shooting $30 higher in just 25 minutes. The quick move carried the metal above $1,350 for the first time since June.
And if one of Wall Street's top technicians is right, the move is just getting started.
On Thursday's "Futures Now," MacNeil Curry, the head of global technical strategy at Bank of America Merrill Lynch, said that there is probably "further upside" in gold. In fact, he's "looking for a move up to the $1,410, potentially $1,450 area."
He presented the three reasons behind that prediction
Reason One: Downtrend was overstretched
Technicians tend to preach "Follow the trend." But sometimes they take a page from Blood, Sweat & Tears and sing "What goes up, most come down"—or vice versa. Simply put, gold fell too far, too fast.
"If you go back and look at what we did in mid-June, the trend was so overextended," Curry said. "This trend had gotten way too stretched, like a rubber band, and now we're snapping back."
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Reason Two: Precious metals are confirming the gold bounce
If gold has a serious reason to move higher, precious metals like silver should move alongside. After all, the two tend to be highly correlated.
That's why Curry viewed Thursday's moves in silver, platinum and palladium—which rose 6 percent, 1.5 percent and 3 percent, respectively—as a great sign for gold.
"The rest of the precious metals complex is now starting to confirm the price action in gold," Curry said. "If you look at silver, if you look at platinum, if you look at palladium, those things are starting to rally as well. So that suggests that this is something more than a short squeeze in gold."
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Reason Three: Unwinding of gold positions has subsided
In the second quarter, three hedge fund titans drastically reduced their gold positions. John Paulson cut his position in the SPDR Gold ETF (GLD) in half, and Daniel Loeb and George Soros both sold the entirety of their (GLD) stakes. But Curry takes this as good news.
"If you look at where a lot of these position unwinds have been transpiring, they've been transpiring in (GLD)," Curry said. "And if you look at the shares outstanding in (GLD), you can see that that is starting to stabilize, which suggests that some of the rampant selling or unwinding that drove this market significantly lower has subsided, at least for the time being."
Now that Soros and Loeb have liquidated their (GLD) stakes, and Paulson has cut his in half, a major source of pressure for the market has been removed.
Altogether, Curry says the momentum is clearly pointing to the upside. "I certainly wouldn't be stepping in front of this thing here," he said.