Gold futures rallied past $670 an ounce for the first time in six months today. Gold has been on a rampage since early January, climbing about 10 percent in a month.
Neal Ryan, director of economic research at Blanchard, sees this as a jumping off point for gold.
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"We've been consolidating at these resistance points for a week now and have been searching for a reason to jump past the $660 level for gold [and] $14 level for silver," Ryan tells MarketWatch.
"I think it's market investors realizing that there is a confluence of very bullish news all hitting the gold market at the same time, which will provide for a sustained price rally," he added.
Fresh rumblings from Iran about its nuclear program pushed both gold and oil up today. Gold is considered a safe haven in times of uncertainty. Iran's supreme leader, Ayatollah Ali Khamenei, warned the U.S. of reprisals if Iran is attacked.
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"Reverberations of yesterday's fiery rhetoric coming from Tehran were also felt in the bullion marketplace as participants remember all too well how the U.S. normally takes to such provocations," Jon Nadler, an analyst at bullion dealers Kitco.com, commented to MarketWatch.
In addition, Wall Street seems to have woken up to the fact that the housing crash isn't over yet after HSBC, the world's third largest bank, announced its bad debt charges will be 20 percent higher than forecast.
That's bullish for gold because investors may increase demand for the yellow metal if they think the economy is heading for recession.
"If the problem worsens, it may be a first, but ugly sign that the U.S. economy, and many of its consumers and borrowers, are in trouble," Nadler said.
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Plus, Rodrigo Rato, managing director of the International Monetary Fund, reassured the gold markets by saying that any gold sales would only be part of the solution for curing the institutions fiscal woes and shouldn't disrupt the gold market.
The IMF last week proposed the sale of 400 metric tons of gold. If they sell all of it at once, the flood of gold onto the market would likely push prices down.
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Editor's note:
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