Gold price could see more upside with a delay in rate hikes

San Francisco (Feb 3)  The yellow metal is trading near three-month highs and has been above $1,100 per troy ounce for the last week and a half as global equity markets try to find their footing.

According to Todd Horwitz, chief strategist at BubbaTrading.com, there may be more upside ahead for gold. Tied to his bullish outlook is his belief that the Fed won’t raise rates any time soon, which will precipitate the greenback’s decline.

Gold is generally thought to move in the opposite direction of the U.S. dollar and interest rates.

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“I think the dollar's going to start to selloff because the big banks are telling me that nothing is going to happen with the Federal Reserve,” said Horwitz from the Chicago Mercantile Exchange. “We're not going to see any more rate hikes ... The dollar is going to start to work its way lower.”

Though most market participants expect a few small rate hikes during the next 12 to 18 months, Horwitz has a more aggressive prediction that the Fed will turn back the clock and resume its easy money policy of quantitative easing.

In the meantime, he is a buyer of gold and sees the $1,140 per troy ounce price as the metal’s next target price. It traded as high as $1,133.40 per troy ounce on Wednesday morning.

“If we get through $1,140, we get a clear path to $1,180,” Horwitz said. “It's something I want to own.”

Source: YahooNews