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US elections will push gold to hit $1,500: Technical analyst

Gold is on course to head as high as $1,500 per ounce, according to a technical analyst, who says the current environment will disrupt the usual inverse relationship between the U.S. dollar and the precious metal.

According to Ron William, Founder & Principal Market Strategist at RW Market Advisory, the impending presidential election will create an anomaly to normal market moves as investors pull back from risk exposure around the November 8 vote.

"Traditionally yes, the inverse correlation has always been there. But there are exceptions and I think this is when it depends on the timing of the move, but also the cause. In this case it will be more of a safe haven flow argument, the U.S. dollar in particular, given what might happen around the election cycle," he told CNBC's Squawk Box Europe.

The gold price has jumped around 20 percent so far in 2016, peaking in mid-July and slipping notably around the start of October. The precious metal was hit by a raft of factors, including hawkish Fed comments, which led to increased expectations of a rate rise and therefore dollar strength; disappointment regarding action from the Bank of Japan; and some better-than expected US economic data releases.

In William's view, the current price point now leaves room for upside.

"Gold has already unwound from its overbought conditions. We had very crowded positions at the recent high - it's looking like it's ticking up again on the back of Friday's uncertainty and now gold is pushing up, I suspect that will continue technically until the 1,500 mark," he forecast.

This bullish view is to be contrasted with the outlook proffered by other banks, including Wells Fargo, which says the recent sell-off is just the beginning.

According to a report penned in early October by John LaForge, its head of real asset strategy, "Is the $60 drop in gold prices the beginning of a deeper dive? Our answer is yes, it may very well be."

"The history of gold, and commodity super-cycles, says that gold may very well lose another $200/oz., testing the $1,050 level, before it is time to buy again," he opined.

Meanwhile, another bank growing bearish on the precious metal is ABN Amro which revised its gold forecasts as of mid-October down to$1,200 for 2016 and $1,150 in 2017.

According to the report authored by Georgette Boele, co-ordinator FX and precious metals strategy, "Gold prices have fallen and broken below the 200-day moving average. This means that this year's uptrend is over. We have revised downwards our gold price forecasts because we think that investors will continue to liquidate."

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