Gold price (XAUUSD) is up slightly today as investors react to the overall weaker US dollar, rising tensions between the US and China, and the ongoing stimulus talks in the US. As of this writing, gold price is up by 0.70% to $2,032 while silver price is up by 3.80%. Other metals, too, are rising with copper price up by 0.65% and platinum up by 0.30%.
Analysts sees gold price doubling
A few days ago, gold price crossed the important milestone of $2,000, pushing its year-to-date gains to more than 30%. This means that the metal’s price has outperformed the overall stock market this year.
Still, analysts remain extremely bullish on gold. Indeed, some now believe that the next resistance level will be at $2,000.
In an interview with CNBC, Frank Holmes, a renowned analyst who works at US Global Investors said that he believes that the metal’s price will hit $4,000 in the next three years. He pointed to the widening budget deficit in the US and the recent stimulus packages. Also, he cited the ongoing printing of money by global central banks. He said:
“We’ve not seen this level where central banks are printing money at a zero-interest rate. At zero interest rates, gold becomes a very, very attractive asset class.”
There are two main sides to the ongoing spending. Under the Trump administration, the national debt has soared to more than $6 trillion. And this trend will continue if the ongoing stimulus talks lead to more stimulus.
At the same time, recent polls suggest that Joe Biden will win the upcoming election. In the past, Democrats are known to be bigger spenders. Therefore, if he wins, the amount of deficit is likely to continue rising, which is a positive thing for XAUUSD.
Holmes is not the only analyst who expects gold price to continue rallying. A few weeks ago, we wrote that Bank of America analysts had upgraded their gold target to $3,000. And on Friday, Bob Kirtley, an analyst at Seeking Alpha said that he expected that gold price would double from here and then soar to $12,000. He said:
“And so, this suggests to me that gold will rise rapidly and could easily double to $4,000/Oz and then triple to take it to $12,000/Oz once the mania gains momentum.”
Gold price technical outlook
The long-term chart below shows that gold price has been in an upward trend after bottoming at $1,015 in 2015. The price crossed the important resistance level of $1,916 two weeks ago. It is now above the 50-day and 100-day exponential moving averages while the RSI has climbed to the highest level since February 2008.
Therefore, I suspect that the price will continue rising as bulls aim for the next resistance at $2,100 in the short term. On the flip side, a move below the March low of $1450 will invalidate this trend.
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