Gold hit a new nominal high near $1,100 an ounce on Friday, and Michael Dudas, metals and mining analyst at Jeffries & Co., thinks the precious metal will continue to touch higher lows and higher highs. (See his gold-related stock picks, below.)
"Certainly in commodities you do get overbought and oversold conditions," he said.
"But certainly the print on the unemployment number this morning gives bulls some more ammunition: that the Fed's going to continue to be accomodative for a long period of time."
Along with the US central bank announcing that it will keep interest rates at near zero for "an extended period," the India central bank's purchase of 200 tons of gold show that the metal is, in a sense, becoming a currency, Dudas said.
"I think central banks and investors continue to be underweight gold in their portfolios, and that could lead to some re-rating, as people continue to fear excess liquidity," he said.
Newmont Mining — This large-cap has been controlling costs and keeping production levels up, he said.
Agnico-Eagle Mines — This stock has been oversold lately because of a disappointment in production growth, but its production will still double over the next year and a half, he said.
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Dudas does not own any shares of the stocks mentioned above.