Forex Flash: Citi sees Gold at $3400/oz in two years

FXStreet Team FXStreet

FXstreet.com (Barcelona) - On the latest Citi's FX Technicals group research titled "The 12 Chart of Christmas, the bank sees Gold in the $2,300-2,400 area in the 2nd half of 2012: "While we remain cautious on Gold in the near term and believe that we could correct lower towards $1,600 and possibly re-test the $1,550 area we continue to believe that the bull market remains intact. As with the Equity market we believe that 2012 may be reminiscent of 1978 when Gold rallied nearly 50% off the 1977 close."

The team adds: "On a longer term basis we expect even higher levels and target a move towards $3,400 over the next 2 years or so. We are not yet on board with the idea of a move with the same magnitude as seen in 1970-1980 when the last spike in Dec 1979-Jan 1980 saw Gold almost double in price as Russia invaded Afghanistan. Such a dynamic would suggest a move above $6,000 but we prefer to take a more conservative stance and look for a move similar to that seen without that final event driven push at the high which was a 'blowout top' in Jan. 1980."

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