A Pullback in Gold is a Good Buying Opportunity; Prices to Hit $2,500

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The gold market is stuck in a channel as it tries to hold its ground around $1,750 an ounce; the spark that could ignite the next phase in the precious metal's rally could be just around the corner, according to Phillip Streible, chief market strategist at Blue Line Futures.

In an interview with Kitco News, Streible said that momentum in equity markets is providing some competition for gold; however, he added that this enthusiasm could prove to be misplaced.

"The federal reserve is propping up all U.S. equities and the prices of most assets right now. That's causing this, this fear of missing out in the equities," he said. "The reality is: on the equity side, earnings are going to continue to fall. A safety value play will come into effect and that's where gold prices really take off because the fed is completely handcuffed right now."

Streible said that the Federal Reserve is running out of options to continue to prop up the equity markets. He added that although the U.S. central bank won't introduce negative interest rates, markets will continue to price in this scenario. This is the environment that will push gold higher in a long-term bull market, he said.

Streible reiterated his call for gold prices to push to $2,500 an ounce, with prices taking off in 2021.

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