End Of Consolidation Phase: Gold Breaks $1993

Eric Blair Oct 14, 20

EDITOR NOTE: Credit Suisse strategists see gold hovering at its current range, above $1837 and under $1900, as it consolidates for further upside in the next few months. They’re expecting gold to hit fresh new highs in 2021. This forecast, based on the technical action, is one of the more conservative ones we’ve seen. Add in the fundamentals--COVID uncertainties, Federal Reserve action, unemployment, election risks, etc--and the price targets expand, with institutional forecasts ranging between $3000 to $10,000. Consolidation = opportunity to accumulate more of the safe haven metal. As you know all too well, we’re going to need it.

Gold (XAU/USD) consolidation extends as expected by strategists at Credit Suisse but with new highs eventually expected next year. On Wednesday, the yellow metal’s rebound remains capped below the $1900 mark, consolidating Tuesday’s 2% slide.

Key quotes

“Gold extends its consolidation/correction following the move to our base case objective of $2075/80 in August but is still holding flagged support at $1837, the 38.2% retracement of the rally from March. We look for this to continue to hold to maintain the sideways range ahead of a break above $1993 for a fresh look at $2075.”

“An eventual move above $2075 stays looked for a resumption of the core bull trend with resistance seen next at $2175, then $2300, although we continue to believe this will not be seen until next year.”