Violence in Iraq and Syria has sent gold to $1,273 per ounce, up around 1 percent on Thursday and now in the midst of its biggest five-day winning streak since March.
After a hot start, it’s been a brutal quarter for bullion. As the crisis heats up in the Middle East, will gold regain its status as a safe haven trade?
“I think gold can do okay in the near-term,” said Oppenheimer’s head of institutional portfolio strategy Andrew Burkly, who pointed out that seasonally, gold tends to pick up in the summer months.
But Burkly isn’t betting on a long-term bounce. “I think the secular dynamics are still weighing against gold,” he said. “True underlying inflationary pressures that would be coming from any kind of money velocity or aggregated demand picking up are still really lacking in terms of the recovery. I still don’t see that.”
From a technical standpoint, however, Richard Ross of Auerbach Grayson doesn’t see any reason to own bullion at current levels. “The chart of gold is rather un-compelling,” he said.
Ross pointed out two key levels on the charts. On the lower end, support at $1,180 an ounce and on the higher end, resistance at $1,400. “It’s really going to take a breakout up above that $1,420 [an ounce] level in order for me to get mildly excited about gold. And even then I only see upside to that 150-week moving average which comes in around $1,525 [an ounce].”
Check out the video about for Burkly and Ross’ full discussion on CNBC’s “Street Signs.”
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