$5,200 Gold is Long-Term Channel Target

With so much volatility in gold and silver, today King World News interviewed legendary technical analyst Louise Yamada of Technical Research Advisors.  


When asked about the action in the metals markets Louise remarked, “We are still of the opinion that gold is still in a structural bull market but you had a little bit of a run-up here which is normal, after which one would expect a consolidation to be taking place.  What we didn’t anticipate of course is the rapidity with which gold and silver pulled back, particularly silver which was on a parabolic rise prior to the pullback that we witnessed.”

“I certainly think that (silver) was due for a good reversal of what appeared to be an interim speculative bubble.  But longer-term you can’t deny that silver has just come out of a 30 year basing process and I think is in a longer-term bull market.  But after you have this sort of speculative run-up and decline, you are probably going to have to see a period of weeks to months of a consolidation and reestablishing the next base from which price can pick up at a later date. 

...We haven’t had that many bull markets in it (silver).  I think it’s intriguing that price went right back up to that major resistance of the old top and has stalled let’s say.  It probably needs to come back and stabilize in the 30’s, I’d like to see it hold in the 30’s here.”

When asked about gold specifically Louise stated, “Well it hit our target at $1,500, so that is due for a rest in terms of achieving a target and than taking a little bit of a breather.  But certainly $2,000 is next and we have higher targets over the long-term for gold.  If you look at it from a very, very long-term perspective all the way to the early ’70’s when the dollar was delinked, the long-term channel line could take you to $5,200.”      

When asked if the commodities takedown was an attempt to push money into stocks Louise replied, “Well that’s a very interesting question, I think that’s certainly a possibility let’s put it that way for those who want to conceive of a contrived underlying motive.”

Louise Yamada was Managing Director and Head of Technical Research at Smith Barney (Citigroup).  Her career there spanned 25 years where she was a perennial leader in the Institutional Investor poll, and she was the top-ranked market technician in 2001, 2002, 2003 and 2004 before starting her own firm LYA in 2005.

The King World News interview with Louise Yamada is now available and you can listen to it by CLICKING HERE.






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