Gold is going back to $1,050 says Wells Fargo analyst
Gold and commodities entered a drawn out bear market five years ago and there are many more years of pain to go, says John LaForge with Wells Fargo.
"Traditionally those long bear markets for commodities average about 20 years—and that is using data back to 1800—and we are only in year five."
Laforge sees gold heading back to its December lows since a commodity will "go back and test its lows off of the first move down multiple times."
Gold is up about $300 this year after hitting a low of $1,050 in December.
LaForge said this year's run up was overdue considering the gold's three year slide.
"I am a big believer in reverting to the mean and we definitely needed a bounce off of $1,000," says LaForge. "I would say it is going to be tough from here."
LaForge has made bearish statements about gold in the past. In 2014 he saw $660 per ounce gold as "in the cards."
Creative Commons image of bear by Daniel Hartmann.