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Hedgeye's McCullough: Gold Headed Still Higher

By    |   Sunday, 16 Mar 2014 02:18 PM

Gold has surged 15 percent so far this year, and Keith McCullough, CEO of investment research firm Hedgeye Risk Management, says the rally has further to go.

"This is much like 2011," when gold benefited from falling interest rates and a weaker dollar, McCullough told Yahoo. "I do see gold making a series of higher lows and higher highs. You can easily get into the mid-$1,400s in here in fairly short order.”

April gold futures settled at $1,379 an ounce on the Comex Friday, after hitting a six-month high of $1,388.40 earlier in the day.

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McCullough thinks that rising inflation will help push gold higher. Indeed, he thinks inflation already is on the march, even though consumer prices increased only 1.6 percent in the year through January.

"The most glaring [example of inflation is] in food prices," McCullough said. "The CRB foodstuffs index is up around 15 percent year to date, and the CRB commodities index is up 11 percent."

In addition, "the reality is we’re seeing wage inflation for the first time in a long time." Average hourly earnings rose 0.4 percent in February.

Some other market participants are turning bullish on gold, too. "We’re seeing investors shift out of riskier assets like the stock market and into the safety of gold," Phil Streible, a senior commodity broker at R.J. O’Brien & Associates in Chicago, told Bloomberg.

The crisis in Ukraine has helped push many investors to seek gold as a haven from international turmoil.

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Gold has surged 15 percent so far this year, and Keith McCullough, CEO of investment research firm Hedgeye Risk Management, says the rally has further to go.
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2014-18-16
Sunday, 16 Mar 2014 02:18 PM
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