Gold Is On Its Way To New All-Time Highs

The gold price stuck its head out above the 1300 dollar per ounce level last week once for the first time in months; in general it had a great week leading up to the announcement of the upcoming expansive monetary policies of the European Central Bank. Now that the QE program agenda is known, however, one can ask the question: what does this mean for gold? According to Jim Wyckoff, senior analyst at Kitco, the picture is very clear: gold has reached its bottom and new all-time highs are ahead.

In an interview with Hardassetinvestor Jim Wyckoff explained that the European Central Bank did what it had to do. In his opinion, the bank had its back against the wall. What we have seen, however, is that gold was a true safe haven and that demand really picked up in the week leading up to the announcement of the ECB.

Gold Is Up

Wyckoff believes that there are currently 3 things that are working to the advantage of the precious metal. First of all there is the demand from investors not only inspired by QE, but also due to the unexpected move of the Swiss National Bank to decouple the Swiss franc from the euro earlier this month. At the same time there is new cash flowing into gold-backed ETFs. These are all reasons that explain why gold is up.

Gold also reached its bottom, according to Wyckoff. He believes that gold’s first stop will be the high of August 2014 when gold was at 1323 dollars per ounce. The next step is 1350 dollars and the big resistance level is at 1400 dollars. He does underline that in the coming years we will see new all-time highs for gold. It does not require a scientist to understand and recognize the cyclical nature of commodity prices. Wyckoff expects both gold and oil to be booming over the coming years.