CNBC: Wells Fargo Turns Positive on Gold, Here is How the Firm Sees it Going

Article by Stephanie Landsman on CNBC Financial

With gold trading around one-month lows, the Wells Fargo Investment Institute is getting bullish.

John LaForge, the firm's head of real asset strategy, sees gold regaining its luster and delivering profits for investors.

"When your stock corrections are in the 10 to 15 percent level, which is kind of what we're in now, what we often find is that investors go out and search for some kind of insurance," he said Tuesday on CNBC's "Futures Now." "They typically will buy gold — even on a bounce in stocks."

LaForge's bullish case is built on more than just the stock market cycle. The U.S. dollar index, which hit 52-week highs this week, is also a key element of his refreshed forecast.

"The dollar is a little too high. It has to back off," he said.

Typically, gold and the greenback move in opposite directions. So, as the dollar softens, it should provide a positive catalyst for the yellow metal.

LaForge predicts $1,300 an ounce within the next 12 months, an 8 percent gain from current levels.

"$1,200 an ounce currently is not so bad when you look around at all these different assets prices getting crushed," he said.

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