Gold Price Forecast – Extreme Caution Warranted

Gold and precious metals have rallied sharply since their March liquidation lows. Price momentum and bullish sentiment are now at extremes. We believe gold could form a temporary peak any day and begin a sharp multi-week correction.

The gold mining ETF (GDX) often leads gold prices into significant turning points (intermediate tops and bottoms). The current trend in GDX is slowing, and we are beginning to see signs of exhaustion.

GDX UPDATE: Last Thursday, GDX closed below its recent price gap, inferring trend exhaustion. Yesterday’s black candle is another potential ominous sign. Any close below Wednesday’s low ($44.02), would establish a short-term sell signal.

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GOLD NEAR-TERM PRICE LEVELS

Any close back below $2000 in the coming days would support a spike high and temporary peak in gold. If a top is confirmed, we see the potential for a sharp correction to $1750 with a 30% chance of revisiting $1670.

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Our intermediate Gold Cycle Indicator reached a max overbought reading for 450. The next buy signal won’t arrive until it drops back into minimum bottoming. In March, it reached a perfect buy score of zero.

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I see the potential for increased volatility this week, especially surrounding Friday’s employment report – extreme caution is warranted. 

For a look at all of today’s economic events, check out our economic calendar.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

 

Gold Price Forecast – A Potential Spike High This Week

The US dollar spiked to 103.96 during the March liquidation. Prices are down over 10% from that peak; the trend is very oversold. An interim bottom is becoming likely, followed by a 1 to 3-month consolidation.

Near-Term Levels for The Dollar

Confirmed Bottom: Progressive closes above 94.00 would confirm a cycle low and potential multi-week pullback in precious metals.

Continued Breakdown: A continued breakdown below 92 could trigger a waterfall decline into October. In this scenario, gold would likely extend above $2100 and enter a parabolic rise.

SUPPORTING EVIDENCE

In the past, a dip below 20 in the daily RSI (14) characterized an interim cycle low. The reading reached 18.61 Thursday, July 30, 2020. The odds for a potential bottom in the Dollar and temporary spike high in gold are significant within the next several days.

GOLD NEAR-TERM PRICE LEVELS

Parabolic Rally: A waterfall decline in the Dollar could trigger a sharp rise). Progressive closes above $2100 would establish this scenario.

Temporary Top: A spike above $2000 could trigger a quick, but unstained rally (spike-high) in gold above $2000 this week.

Be cautious. I see the potential for increased volatility this week.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Precious Metals Weekend Wrap-up August 1, 2020

Now that we have encouraging data, we should be able to make informed decisions concerning on how to move forward. Unfortunately, politicians are making this much worse than it needs to be. The damage they have done to the economy is immeasurable.

It’s reported that 55% of restaurants on Yelp have shut their doors for good. And some estimate that 33% of the hotels in the U.S. could go out of business. In my opinion, the economy is yet to feel the long-term consequences of this economic shutdown.

Gold reached new all-time highs on the back of a declining dollar. I expected a breakout above $2000, but not until 2021 or 2022. What happens next depends on the dollar. If the dollar stabilizes and turns higher, then gold should correct and begin to consolidate. If the dollar continues to crash, then gold could enter a runaway move higher.

The Fed announced no change in its interest rate policy on Wednesday and said it would do everything necessary to support the economy. Sometimes gold and the dollar reverse trends (top or bottom) just after a Fed decision. The dollar formed a bullish engulfing candle on Friday, supporting the potential for a reversal.

The gold cycle indicator remains pegged at 450, and gold is very overbought.

US DOLLAR

Gold is higher as a direct result of the crashing dollar. The dollar is incredibly oversold and due for a bottom, which would imply a top in gold. I’ve mentioned before how prices often reverse on or just after a crucial Fed meeting. The dollar formed a bullish engulfing candle on Friday, 2-days after Wednesday’s announcement. Closing above the 10-day EMA (currently 94.11) next week would sponsor a bottom.

GOLD WEEKLY

It’s rare for prices to slice through a significant resistance level without consolidating first. And for that reason, I’m suspicious of the recent breakout to new all-time highs. When momentum is strong, like now, prices will sometimes overshoot a major level. If this is a momentum overshoot, then gold should stay below $2050 and finally turn lower. A sustained advance above $2100 would signal a potential runaway move.

GOLD DAILY

Gold reached an intraday high of $2005.40 on Friday. Prices are very overbought, and the cycle indicator is maxed out at 450. The trend is well-overdue for a correction. A daily finish below $1971.40 would secure a swing high and signal a potential top.

SILVER

After breaking out above $20.00, silver exploded to our $26.00 target. Prices are overbought and due for a pullback. Closing below $22.50 would support a top. To extend this advance, prices would have to close above the $26.27 spike high.

PLATINUM

Platinum is the last precious metal to breakout to fresh highs. Prices would have to close above $1050 to signal a breakout. Whereas dropping below the cycle trendline would indicate a correction.

GDX

On Thursday, miners closed below Monday’s gap, issuing a potential exhaustion gap sell signal. Miners would have to close above $44.46 to reverse the short-term bearish signal. To confirm a multi-week correction – GDX would have to close below $36.87.

GDXJ

Juniors also closed below Monday’s gap, triggering a short-term sell signal – prices would have to close above $63.31 to reverse it. Otherwise, breaking below $50.00 would confirm the onset of a multi-week cycle correction.

SPY

Stocks consolidated throughout the week but managed to close above the short-term trendline on Friday. It looks like prices will attack the February 329 gap next week. Like gold, the trend is incredibly overbought and ready for a correction.

Have a safe and pleasant weekend.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – Gold Miners Flashing A Potential Sell

Gold futures tested $1998.40 yesterday, and we see the potential for a post-Fed meeting pullback in precious metals. Gold miners will often lead the metals into key turning points. Here are the levels I am watching in GDX.

GDX DAILY CHART (10:30AM): If GDX closes below $41.70, I see the potential for a top at $44.46. A subsequent breakdown below the mid-July pivot ($36.87) would confirm an intermediate cycle top. If confirmed, expect a multi-week correction back towards the $30.00 level.

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Our intermediate Gold Cycle Indicator is at max cycle topping (450), supporting a near-term peak in precious metals. A correction here would trigger a September buying opportunity.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.

 

Gold Price Forecast – Gold Near Record Highs, What’s Next?

Gold has had a nice run after bottoming at $1450 in March. However, prices are coming into major resistance, and multi-week correction is becoming likely. A decline back towards $1550 in the coming weeks could be one of the last great buying opportunities.

Gold reached an intraday high of $1897.70 yesterday, and prices are within striking distance of $1923 (the all-time high). Momentum could take prices a little higher, but I would be surprised if they pushed through $1923 on the first try. For that reason, I believe the upside may be limited, currently.

GOLD WEEKLY CHART: With gold breaking through resistance surrounding $1800, the next logical resistance comes in at $1923.70 (the 2011 high). If prices peak around here, I will expect a decline back towards the $1550 – $1600 level.

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Note: With governments firing up the printing presses, it is just a matter of time before gold breaks above $2000. We see a sharp rally into 2023 or early 2024. A decline back towards $1550 could be one of the last great buying opportunities.

SILVER UPDATE: Silver blasted through resistance surrounding $20.00, striking an intraday high of $23.67. There is little technical resistance in this area, and a jump to $26.00 is probable before prices take a breather.

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PLATINUM UPDATE: Platinum remains a laggard (for now), with prices still below last year’s $1046.70 high. At some point, I believe prices will play catch up to gold. A rally above $1050 would sponsor an upside breakout.

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GOLD MINERS (GDX): Gold miners have been weak, relatively speaking, when compared to gold, which is testing its all-time high and silver, which recently broke through critical resistance. Their lack of participation suggests an intermediate top may be nigh.

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A daily finish below $40.38 and then $39.30 in GDX would sponsor a cycle top and multi-week correction in miners.

Our Gold Cycle Indicator reached a max value of 450, a cycle top is becoming likely. We remain in the timing window for an intermediate peak.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.

 

 

Silver Price Forecast – Metals and Miners Breakout Update

Silver just exceeded the 2016 high ($21.23) – the next 24-hours are critical. If silver rallies through $22.00, we could see a short-covering rally that shoots prices to $25.00+ rather quickly.

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However, it is important to note that silver will sometimes spike just above a previous high before reversing sharply lower. This is still a possibility as prices probe the $21.20 – $21.50 area. Dropping back below $20.00 would support an intermediate cycle peak.

GDX DAILY

In miners (GDX), we can ratchet up the bearish reversal level to a daily finish below $40.38.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – Critical Metals and Mining Update

It is a high-stress day in the metals and mining markets. Miners and Silver are threatening a breakout – the next 48-hours are critical.

-GDX (11:35 AM)- Today’s gap in miners (GDX) is critical. If the gap remains open (prices stay above $39.33), then I see the potential for a spike higher. If today’s gap fails (a daily finish below $39.33), then prices likely peaked.

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Silver futures are above $20.00, and prices could be breaking out. The next few days are critical. If silver continues to explode higher through $21.00, then it could hit $25.00+ quickly. A breakdown and bearish reversal in the next 48-hours would imply a “breakout-fakeout.”

Gold Futures tested $1820, and prices stalled a bit. They need to exceed $1825 within the next 48-hours to maintain bullish momentum.

Dropping back below $1800 would sponsor an intermediate top and beginning of a 1 to 3-month correction towards $1550.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.

 

 

Gold Price Forecast – Gold Prices Could Top This Week

This week’s employment data could trigger a breakout in gold above $1800 or force an intermediate top. Expect increased volatility over the next 2-days.

To sustain a breakout, I’d need to see a daily finish in futures above $1820. Whereas closing below $1770 in the coming days would promote a top followed by a 1 to 3-month decline.

Beware of False Breakouts

A favorite trick of manipulators is to get prices just above a resistance level and then wash the market with sell orders. I’m not sure if that will happen this time, but it’s a distinct possibility.

Our Gold Cycle Indicator reached 441 and is within maximum topping. The conditions are ripe for a cycle top. If prices peak, expect a decline in gold to $1450 – $1550.

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GOLD

Gold is testing the waters around $1800, and I think we will know by Thursday’s employment report if prices are breaking out or topping. It would take a close below $1770 to support a potential top. Whereas a daily close above $1820 would promote a breakout and a run to $1900.

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SILVER

Silver is also threatening to breakout to fresh highs, and a strong rally through $20.00 would be incredibly bullish. Prices are at a critical juncture – this is where price manipulators thrive, so be careful.

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GDX

I think we will find out within the next 48-hours if gold and miners are breaking to new highs or if prices are topping. To support a breakout in GDX, I’d need to see a strong rally through the $38.00 level. Failing to break through $38.00, on significant volume, would keep the potential for an immediate top alive.

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GDXJ

Juniors made a new closing high and are approaching the May high ($50.37). A strong move through the $51.00 – $52.00 area would support an upside breakout. Whereas slipping back below $45.00 would recommend a top.

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Markets are closed Friday.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – A June Top Followed by A July Drop

Several weeks ago, I noted that gold was repeating its 2016 and 2018 consolidation patterns. In line with our forecast, gold reached $1796.10 on Wednesday, and an interim top is becoming likely. Next, we are looking for a breakdown in July, followed by the next great buying opportunity.

As a technician, I am continually on the lookout for recurring or repeating patterns. In April, I noticed gold was setting up for a repeat of the 2016/2018 consolidations. Meaning, as long as gold stays below $1800, then a decline back towards $1500 is likely.

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Gold Price Forecast

Typically, intermediate consolidations last anywhere from three and four months. If prices peak around $1800, this is what I will expect over the next several weeks.

1) A breakdown below $1660 in the last half of July.

2) A bounce off the 200-day MA and failed attempt to recapture $1660 – $1670.

3) A final decline towards $1500 and the next great buying opportunity.

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Gold Big Picture

Longer-term, I am are very bullish on gold. The above forecast dovetails nicely with our larger 10-year pattern. To maintain symmetry (on the right side), gold should consolidate between $1500 and $1800 into 2021 before breaking decisively above $2000. Ultimately, I think gold could reach $8,000 – $10,000 later this decade.

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Conclusion

Fundamentally the case for gold has never been better; prices are in a bull market. However, as volatility increases, attempting to time each swing will become increasingly more difficult. One mistake could cripple your trading account. Consequently, I shifted to a long-term accumulation strategy aimed to reduce stress and improve long-term gains.

Our Gold Cycle Indicator is at 440 and within maximum topping. A cycle peak is becoming likely.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.

 

Gold Price Forecast – Gold Could Breakout or Top This Week

Our primary forecast expects a top followed by a breakdown below $1660 this summer.

The Fed has been aggressively backing the economy. Last week, they announced they would begin buying individual corporate bonds, something they’ve never done. See Fed balance sheet below.

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https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

Liquidity seems to favor the high-flying tech sector with the NASDAQ near all-time highs. If the risk-on trade is back, gold may begin to take a backseat – it performs best when fear is high.

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GOLD PRICE FORECAST

Overall, I think the 2020 consolidation could go on for another month. Eventually, prices should break below $1660, and approach our primary target between $1500 and $1550. A deeper correction to the secondary target ($1350-$1420) remains possible. Gold would have to rally sharply above $1800 to register an upside breakout.

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I think we will see a better buying opportunity for gold later this year. Longer-term, demand for precious metals should increase as debt expands. Investors are beginning to wake up to this fact and are losing confidence in governments and their ability to manage. We believe gold started a multi-year advance that should last well into the decade.

Our Gold Cycle Indicator is near topping (currently 332), and an intermediate cycle peak is becoming plausible.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – A Sharp Decline Becoming Likely

With fear subsiding, gold has become less desirable, for the moment. And that could trigger an excellent buying opportunity in the coming weeks.

RECORD SAVINGS

In April, the personal savings rate jumped to a record 33%. Many were unprepared, financially, for the economic fallout. This spike is savings illustrates a desire never to be caught off-guard again. The renewed “preparedness mindset” will sustain a multi-year advance in precious metals, but prices may go a little lower first.

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https://fred.stlouisfed.org/series/PSAVERT

The Fed’s balance sheet jumped to 7.186 trillion. Some economists believe it could reach 14 trillion if there is a second wave of infections.

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https://fred.stlouisfed.org/series/WALCL

The 1918 Flu pandemic had three waves. The second wave was by far the worst transpiring in the fall of 1918.

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REPEATED PATTERNS

It seems every other year gold consolidates for a few months before breaking sharply lower. We had similar consolidations in 2016 and 2018. Each resulted in a significant breakdown once gold fell below vital support. I do not think the 2020 breakdown will be as severe (gold is in a bull market this time). Nevertheless, a deeper than expected correction remains feasible.

THE 2016 CONSOLIDATION:

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THE 2018 CONSOLIDATION:

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THE 2020 CONSOLIDATION

Overall, I think the 2020 consolidation could go on for another month or so. Eventually, prices should break below $1660, and approach our primary target between $1500 and $1550. A deeper correction to the secondary target ($1350-$1420) remains possible…if liquidity continues to flow into the stock market.

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Overall, gold continues to consolidate. I continue to look for a much better buying opportunity later this year. Longer-term, demand for precious metals should remain high as debt expands, endlessly. Individual investors are beginning to wake up as they lose confidence in governments and their ability to manage.

For a look at all of today’s economic events, check out our economic calendar.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – The Next Buying Opportunity

Unless the dollar breaks sharply lower, I don’t see gold breaking above $1800 anytime soon. If my consolidation theory is correct, gold could drop back towards $1450 – $1525 by August/September.

Our Gold Cycle Indicator is at 378, and we are once again in the minimum cycle topping.

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CONSOLIDATION CHART

Gold appears to be in a high-level consolidation similar to what we saw in 2016 and 2018. If correct, then prices will remain rangebound (between $1650 – $1800) through June and into July before finally dropping into the next 6-month low. It would take a decisive breakout above $1800 to support a run to $1900 – $2000.

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GOLD BIG PICTURE

The larger 10-year pattern in gold suggests prices may consolidate below $1800 for several months before finally breaking out above $2000 in 2021 or 2022.

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I view any drop in gold back towards $1500 as a “back-the-truck-up” opportunity.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – Prices Could Exceed $10,000 This Decade

The stock market did well from 2010 to 2020 – now it is gold’s turn, are you prepared?

Below is a breakdown of the recent decades with their preferred assets.

  • During the 1990s, the stock market was the place to be. An explosion in Internet stocks led to the dot.com bubble. The Nasdaq rallied from 330 in 1990 to 5100 by 2000.
  • During the 2000s, precious metals and commodities were the best performing assets. Gold rallied from a low of $255 in 2001 to $1923 by 2011.
  • During the 2010s, money flows switched back to the stock market. The DOW bottomed at 6469 in 2009, and prices topped at 29,600 in February 2020.
  • The 2020s should favor tangible assets and commodities as supply shortages, and currency debasement creates widespread panic and a global depression. 

After a 10-year bull market in stocks, the next asset shift is unfolding before our very eyes. That, combined with the 2019 breakout in gold, confirms the next decade should heavily favor precious metals and tangible commodities. Our Basic Metals Portfolio was designed to navigate these times with minimal investor stress.

Gold Big Picture

In the long-term chart, there is significant resistance around $1800. I assume this is where prices would pause and begin to consolidate. However, the current strength in gold miners is making me reconsider, and we could see gold push straight toward the $1923.70 high set in 2011. I do not think prices will break above $2000 without consolidating first, but we are in unprecedented times, and you never know. I expect gold to hit $8500 – $10,000+ later this decade.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – Gold Prices Testing Major Resistance

GOLD WEEKLY

After peaking at $1923.70 in 2011, gold entered a massive 10-year basing pattern. Surprisingly, the design has remained oddly symmetrical. In June 2019, gold broke above $1400 and completed the 6-year rounded bottom. The current advance should terminate around $1800, and we could get a multi-month consolidation with support around $1500. Once the consolidation has concluded, gold should break above $2000 and push upward to new all-time highs.

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GOLD BIG PICTURE CHART

A multi-month consolidation is likely to begin between $1500 – $1800 as gold stores up energy to break out to new all-time highs in 2021 or 2022. Longer-term our forecast calls for $8,500 – $10,000 gold later this decade.

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MINING UPDATE

The immediate upside in gold may be somewhat limited, but that does not mean miners cannot breakout – they have been lagging gold since 2016. A successful breakout in the coming days/weeks would signal the next stage of the bull market as miners play catch up to the price of bullion.

You will see in the charts below that miners have been building a sizeable multi-year base below the 2016 highs. Prices are challenging key resistance now, and a breakout is possible in the coming days/weeks. If prices fail to breakout, then they will likely drop back to test their March lows.

XAU WEEKLY

The XAU mining index has been building a base just below the 115 level. A confirmed breakout above 115/120 would support a bullish advance towards 190 kicking off the next phase of the bull market. Failing to break out above 115/120 in the coming days/weeks would send prices back down towards 60.

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HUI WEEKLY

The set up in the HUI mining index is similar. A breakout above the 280/300 level would support an immediate advance back towards 500. Failing to break above 300 would send prices back down towards 160.

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Our gold cycle indicator finished the week at 372. We are at a level where gold may begin to form a top.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Price Forecast – Critical Levels for Gold Prices and GDX

One of their favorite tricks is to force prices to new highs, and then reverse the trend trapping the breakout buyers. For this reason, I’d like to see gold futures close progressively above $1730 before considering a bullish breakout to $1800+.

-GDX DAILY- Above $32.00 supports a bullish breakout to a minimum target of $38.00. Closing below $26.00 would propose a retest of the $16.00 low.

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Member Update (SPY)- Stocks tested the 50-day EMA and significant resistance. Since the meltdown began, stocks tend to selloff before the weekend – traders don’t like holding positions over the weekend. Since today is the last trading day before a long holiday weekend, don’t be surprised if prices drift lower into the close.

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Markets are closed tomorrow for Good Friday. Monday’s open could be volatile. Markets await the next round of bad news.

If you have time, you may want to check out: Gold Forecast – The Real Bottom Should Come in May

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Update – A Stress Free Strategy for Volatile Markets

Today’s markets move faster than ever. A profitable trade one day can turn into a substantial loss overnight. Protective stops are smart but trigger unnecessarily with high volatility. You could have three perfectly executed trades in a row, and the fourth could wipe out everything.

I grew tired of the instability and blatant manipulation in precious metals, over the next few weeks, I’ll be switching to an Accumulative Metals Portfolio (AMP). The strategy will be simple, easy to follow, and in theory, should improve long-term gains. But best of all – I’ll sleep better.

ACCUMULATION STRATEGY

An accumulation strategy works best in long-term bull markets. In my article Gold Price Forecast for The Next Decade, I explained how gold could exceed $8000. At that time, I wasn’t sure what would kick off the decade long bull market. Now, it’s clear to see the coronavirus is the perfect trigger.

An accumulation strategy is simple. Select high-quality investments and add to them regularly (weekly or monthly). Some may choose to buy when prices fall below a specific level, say the 50-day EMA. For me, I’ve decided to buy/accumulate when our Gold Cycle Indicator falls below 100 (currently 132).

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WEIGHTED PORTFOLIO

Here is an example of an equally weighted portfolio. Depending on your risk tolerance, you may choose to be overweight or underweight certain areas. In my strategy, I’ll look to add to whatever stocks are underperforming on a percentage basis. As the bull market advances, I may need to eliminate or add different stocks. Below is an example using google docs.

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All-in-all, I don’t think the world will ever be the same after COVID-19. As governments continue to print money and debase their currencies, the rush to precious metals will only intensify. My long-term target of $8000 in gold may be conservative. Physical bullion is favored and should be the first thing you buy…if you can find some. After that, you may want to consider high-quality miners.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

Gold Miners Update – Gold Miners May Be Topping

As a technical analyst, I monitor support and resistance, looking for optimum reversal levels. The gold miners are in the perfect spot for a top – are they about to turn lower? I think they are.

One of my favorite tools as a technician is to use moving average crossovers. Currently, the mining indexes are challenging a key level. This is the ideal place for a rebound high and reversal lower. See the charts below.

The HUI Mining Index 

The 50-day EMA is crossing below the 200-period moving average. This is a major resistance level. A reversal lower now would recommend a breakdown back towards 145.

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The XAU Mining Index

Same here, the XAU tagged the 50/200-day crossover perfectly yesterday and began to turn lower. A daily finish below 86 would support a rebound high and subsequent retest of the march 62.72 low.

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-GDX DAILY- In GDX, prices struck the 200-day MA on Thursday and immediately turned lower. A close below $25.00 would recommend a rebound high and establish a secondary decline back towards $16.00.

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-GDXJ DAILY- The junior mining ETF fell short of the 200-day MA and likely peaked on Wednesday. A daily finish below $30.70 would establish a swing high and likely top.

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With the US surpassing China in the total number of coronavirus cases, I don’t see the markets stabilizing anytime soon. Over the next week, we will probably see end of the quarter rebalancing. That could trigger another wave of selling. Be ready for the next wave of bad news.

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Above data courtesy of https://www.worldometers.info/coronavirus/

Long-term, I’m very bullish on precious metals. However, our cycles work expects a better buying opportunity for precious metals in May or June.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/

 

Gold Forecast – The Real Bottom Should Come in May

After reaching our March $1700 target, gold entered a sharp, liquidity-driven, selloff. Prices plummeted to $1450 but have since recovered ($1642 as I write). So is the bottom in, or should we expect more selling? Our work supports more selling.

I’m very bullish on gold long-term and believe prices are going much, much higher. But in the meantime, I think we need to be careful. Our cycle work indicates the next sustainable low may not arrive until May or early June.

Cycle Frequency

In the chart below, you’ll notice some regularity to the peaks and valleys for each cycle. The global meltdown that began in March skewed the near-term chart, but it shouldn’t abort the cycle. The typical decline into a 6-month low takes anywhere from 4 to 10-weeks before prices bottom. The recent plunge to $1450 lasted just 5-trading days, that’s way too short to be considered an intermediate-term correction.

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Potential Suckers Rally 

The commercial hedgers and gold manipulators are good at two things. Making money and tricking retail investors. One of their favorite tricks is to push prices back to or just above a recent high to trap breakout buyers. Once everyone has bought, they flood the market with sell orders. I’ve seen this too many times to count.

COT Update

The recent commitment of traders (COT) report shows commercial shorts fell from a record 385,612 contracts to 301,709. A decent reduction but nowhere near where I’d like to see it. A drop to around 200K or lower seems appropriate.

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Chart courtesy of https://www.barchart.com/futures/commitment-of-traders/technical-charts/GC*0

In summary, I believe gold is in the second or third inning of a 9-inning game. Precious metals should prove to be the best performing asset class throughout the 2020s. Physical bullion is preferred. Gold miners and futures are volatile and often manipulated. Take a long-term approach, and you’ll be fine.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/

 

Gold Forecast – Price Breakout or a Suckers Rebound

As a CMT, I search for clues. I turn to gold and gold miners, in this case, GLD and GDX. I watch to see how prices react around certain levels. One of my favorite tools is price gaps.

Gaps in price (up or down) signal emotional stress point for traders. Consequently, they become key support and resistance levels. Gaps can attract and repel price.

Both GLD and GDX are testing key gap levels today. What happens next will provide essential information about gold’s future. Will prices breakout to fresh highs, or will this rally fade at the gaps and turn quickly lower? We should have our answer within the next 48-72 hours.

GLD DAILY CHART

The current spike higher closed the 154 down-gap from 2-weeks ago. Remember, the closing of gaps is a priority during a rebound (the gap acts as a magnet).

  • BULLISH SCENARIO- Progressive closes above the 155 level in the coming days, would support a retest on the 159 high. Progressive closes above 165, on big volume, would sponsor an upside breakout in GLD.
  • BEARISH SCENARIO- Failing to clear resistance between 154 – 155 this week would likely result in a secondary breakdown back towards the 138 level and perhaps lower.

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GDX DAILY CHART

The gold mining ETF is testing a major gap area between $24.50 – $25.50. To me, this is the line in the sand. Progressive closes above $25.50 would support a V-shaped recovery in precious metals, and we could go higher. Failing to close progressively above $25.50 over the next few days back down and a cycle bottom sometime in May.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/

Gold Price Forecast – Stocks May Crash Further

Perhaps I’m old school, but that seems like a recipe for disaster. With just computers and algorithms in control, I see the potential for a sudden and sharp decline in the stock market.

Coronavirus Update

The amount of new daily cases outside of China has grown to approximately 30,000. If the spread continues at this rate, it could double by next Sunday. That would likely trigger another wave of quarantine measures.

I don’t think we should expect a sustainable low in the stock market until the rate of daily cases peaks and begins a clear and steady decline. According to WorldOMeter, on March 20, 2020 there were some 30,664 new cases worldwide. Up significantly from February.

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Sentiment Not Bearish

Even with the relentless decline stocks, the AAII bull/bear spread suggests market participants are still looking to buy the dip in stocks. At previous bottoms, the percentage reached much lower levels (-29.46, -27.97, and -26.54). Therefore, I’m reasonably confident the current reading of -16.79 is not enough to support a sustainable bottom in stocks – dip buyers may get punished.

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Gold Price Update

Longer-term, there is no doubt in my mind that gold is heading higher. Governments are about to print massive amounts of money to offset the economic meltdown. However, gold remains vulnerable to further liquidation after hitting our March $1700 target. I think prices could test $1350-$1400 before this cycle bottoms.

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Our Gold Cycle Indicator (GCI) finished the week at 46. Usually, I would start to look for a bottom about now. However, the current cycle is more aggressive than most, it could take another month or two for prices to bottom.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/