Gold has had a good summer, rising more than 9 percent, but that move may be just the start, according to a bullish Citi precious metal analyst.
Tom Fitzpatrick believes autumn will be golden in the beginning of a run-up that he says will culminate with the yellow metal hitting $2,500 an ounce in the first quarter of next year. The price now stands at $1,736 an ounce.
In his client note this week, Fitzpatrick compares this upcoming rally to gold’s huge move higher in 2007. The report is based on technical analysis of precious-metals market moves that could cause a six-month gain of more than 60 percent, just like the bull run five years ago.
There are plenty of economic concerns that could send the precious metal higher by early next year.
The US fiscal cliff of expiring tax cuts and the possibility of further easing from the Federal Reserve, not to mention a possible breakup within the euro zone, are all factors that could lead to a flight to gold.
Fitzpatrick also spoke to the naysayers who consider all goldbugs as doomsayers: “We are constantly told that ‘gold is a useless yellow metal’ with no real monetary value, yet history belies this.
“For over a decade, it goes higher and higher, and we hear the crescendo of cries that it is unsustainable and a bubble.”