While gold dropped 2 percent Tuesday, its biggest decline in almost four months, Richard Ross, global technical strategist at Auerbach Grayson, sees good times ahead for the precious metal.
Gold prices steadied on Wednesday after falling nearly 2 percent Tuesday. Spot gold was at $1,302.20 an ounce at 0908 GMT, little changed from $1,302.04 late on Tuesday. U.S. gold futures for June delivery were up $2.40 an ounce at $1,302.70,
Reuters reported.
"There are some signs that make gold very attractive at these levels,"
Ross tells CNBC and Yahoo's Talking Numbers. "I'm not a gold bug per se, but I do like a nice chart. And I think that's what we can see here with gold. It has a lot of things in its favor."
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In February 2013, gold's 50-day moving average sank below its 200-day moving average. But last month the two averages swapped positions.
"In addition, the 200-day moving average is sloping higher," Ross argues. "That's telling us both our short-term and longer-term trends are turning higher."
Fundamentals also are moving in gold's favor — a weaker dollar, lower interest rates and volatility in the stock market, he notes.
Gold can reach the $1,420 resistance level, though "it's not going to be a straight shot," Ross warns. "Every time we get a little head of steam, we pull the rug out from underneath us in gold. But, I still think it's a good place to be as we transition from a period of strong seasonality in stocks into one of weak seasonality through the summer months.
"Gold is a buy on a relative and an absolute basis."
Others don't see such a positive environment for the precious metal. "The economy is on the right path and inflation is moving in the right direction, so the Fed can continue with tapering," Bart Melek, an analyst at TD Securities in Toronto, tells
Bloomberg.
"The haven premium seems to be largely diminishing."
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