Down 19% since the start of this year, gold hasn't had such a bad year since 1997, when the yellow metal closed down 20.5%. The fall in gold has come even though the Federal Reserve Bank has added nearly $1 trillion into the financial system since December, 2012. Even though the Fed has indicated in September it will continue its $85 billion monthly bond-buying "quantitative easing" policy unabated for some time to come, gold is still down 3% alone in the last two months. Not even the Fed's easy money seems to help gold longs.
But bullion may be headed towards $1,500 per ounce, according to Bank of America Merrill Lynch's Head of Global Technical Strategy MacNeil Curry. In a recent note to investors, Curry says moves over the past two weeks were reason for his reversal in outlook, writing:
"We have changed our view on gold from bearish to bullish. The impulsive gains from the 1251 low of Oct-15 and break of the 2m downtrend (confirmed on the break of 1330) say a medium term base and bullish turn is unfolding. We look for an ultimate break of the 1433 highs of Aug-28, with POTENTIAL for a push to 1500/1533 long term resistance. In the next several sessions we would buy a dip into 1309. THIS VIEW IS WRONG ON A BREAK BELOW 1251. For those awaiting additional confirmation of a turn, you need to see a break of 1375 (Sep-19 high & right shoulder off a multi-month Head and Shoulders Top)."
In other words, now that gold has broken above $1,330, Curry sees it next going towards $1,433 and potentially as much as $1,500 to $1,533. To be double sure it's headed up, wait for gold to trade above $1,375. All bets are off, though, if it drops below $1,251. Bullion traded at $1,357 on Wednesday.
This wasn't the first time Curry was bullish on gold. Back in 2012, he predicted we'd see gold prices of $3,000 to $5,000 per ounce in the long term. And, in an interview with Talking Numbers, Curry says the long-trend is still positive.
"This is still a long-term bull trend," says Curry. "There has been no damage to its long-term uptrend which began back at the turn of the century."
To see what MacNeil Curry has to say about why he's now bullish on gold and what he sees next for the yellow metal, watch his latest interview with Talking Numbers above.