Gold May Move to $1,400 in 12 Months: Technical Analysis

Source: Bloomberg, Nicholas Larkin  (2/18/10)

"We project about $1,400 within 12 months as long as the $1,000 level holds ."


"Gold may climb to about $1,400 an ounce in the next 12 months, according to technical analysis by Chartered Market Technician Daniel Bruno, who advises banks and hedge funds.

Gold is trading above a trend line that starts from the metal's low in January last year. A climb to $1,419 an ounce would equate to a 150% projection of bullion's rally from January 2009 to its record in December, according to a series of numbers known as the Fibonacci sequence.

Gold "remains robust above its rising trend line," and the recent rebound from a three-month low on Feb. 5 is a "bullish" signal, Bruno said in an interview. "We project about $1,400 within 12 months as long as the $1,000 level holds," he said.

Gold reached a record $1,226.56 an ounce in London on Dec. 3 and is up 0.6% this year. The metal climbed 24% in 2009, a ninth consecutive gain, as near-zero U.S. interest rates and government spending weighed on the dollar and countries including India and China boosted gold reserves. The metal traded at $1,103.85 an ounce at 6:03 a.m. in London.

In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. Fibonacci analysis is based on the theory that prices rise or fall by certain percentages after reaching a high or low."

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