Technician Louise Yamada says there’s one chart showing that gold’s shining rally is far from over.
Gold has surged 14 percent this year, and on Tuesday settled at an 11-month high of $ 1,318.90. This brought the precious metal decisively above the $ 1,300 level where it topped out several times before.
Yamada’s chart of gold dating back to 2013 shows with the $ 1,300 mark broken, “the next level is about $ 1,380.”
Yamada, of Louise Yamada Technical Research Advisors, added Tuesday on CNBC’s “Futures Now” that “$ 1,400, however, would be key resistance because that goes all the way back to 2014, which would be about a four-year base.”
The rise for gold has come as North Korea concerns have spurred demand for safe haven assets, and as the dollar index has fallen to a 2½-year low. Gold tends to enjoy an inverse relationship to the U.S. currency.
If gold continues to rise, stocks could be in trouble.
“Gold and equities move inversely, so if gold continues up here it’s probably possible that we move more into a corrective trend in equities as gold rallies up,” she said. “There’s a lot here that suggest that equities are looking a little fragile under the surface, and it would be logical that you would see equities pull back a little or consolidate.”