Charts: Gold Could Rally to $1,350 in 6 Months
The price of gold could rally higher and reach $1,350 per troy ounce within the next six months, but a dollar crisis could push it even higher, Robin Griffiths, technical strategist from Cazenove Capital, told CNBC.
"It's one of the very few things on the planet at a new all-time high and technically that's always bullish," Griffiths said.
"It's a bit overbought, it might fall back a little bit, but basically its target is for 1,350 (dollars per troy ounce). That's a prediction from the head-and-shoulders shape, which is on the chart," Griffiths said. "Within six months, that sort of time period," he added.
The recent rise in gold prices has been largely due to the weakness of the U.S. dollar, according to Griffiths. But there are concerns over the underlying demand for gold as India's festival season hasn't brought the usually flurry of buying, he pointed out.
"If later we get a genuine dollar crisis, that would involve the dollar-trade-weighted going under 71 (points), you can talk much higher levels for gold and then it would be at a new all-time high in all our other currencies as well," he said.
If investors decide to reduce their risk exposure in the stock market, the dollar would rally, Griffiths said. But that doesn’t mean that gold would have to fall, he added.
"There have been plenty of occasions when both the dollar and gold rallied simultaneously," he said.
- Watch the full Robin Griffiths interview above.
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