Gold Price Is in A New Chart Pattern And There Is No Telling How High It Will Go—Wells Fargo

The comments below are an edited and abridged synopsis of an article by Neils Christensen

Gold has been stuck in a narrow range for nearly two months, and time is running out if the precious metal is going to see a new high above $2,000 an ounce by year-end.

Gold Price Is in A New Chart Pattern And There Is No Telling How High It Will Go—Wells Fargo | BullionBuzz | Nick's Top Six
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However, John LaForge, head of real asset strategy at Wells Fargo, says that gold’s destination is less important than the journey it is on. He maintains his updated year-end target at $2,100, and says that investors should pay attention to the long-term uptrend.

LaForge noted that since hitting an all-time high above $2,000, gold has managed to hold critical support around $1,850. He added that this is an indication of underlying strength in the marketplace.

LaForge is confident that gold will hit his 2021 target of $2,300 in the new year. He remains bullish on gold as nations continue to print money and devalue their currencies. The US hasn’t felt the effects of devaluation because it continues to hold the coveted reserve currency status. However, it’s only a matter of time before the US joins the race to the bottom.

Another factor that will continue to support gold, LaForge said, is the potential for rising inflation due to improving economic growth. Wells Fargo economists aren’t expecting to see major growth in 2021. However, a low-growth environment will lead to continued government support. As money supply growth increases, so does inflation pressure.

Although consumer prices have seen muted inflation this year, it’s only a matter of time before the massive money supply shows up in the general economy. One reason inflation hasn’t picked up is because consumers are deleveraging. All the extra money they have received from the government has probably gone to pay down debt.

LaForge said that when inflation does show up in consumer markets, it will be too late, and that is when gold will surge.

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