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/

Gold Forecast – The Last Great Buying Opportunity of This Decade

The paradigm shift I spoke about last year is unfolding before our very eyes. Precious metals will emerge from this crisis as the premier asset class for investors.

Investment Themes

If you look closely, you’ll notice each decade has a distinct investment theme. As the decade unfolds, one asset class rises to the top and outperforms everything else. Below are some examples.

  • During the 1990s, the stock market was the place to be. An explosion in Internet stocks headed 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 (until now), money flows switched to the stock market. Low and negative interest rates fueled record buybacks and rising earnings multiples. The DOW bottomed at 6469 in 2009, and prices likely peaked in March 2020 at 29,600.

Of course, it’s impossible to get in and then out at the exact bottom. The transition period from one asset class to another takes several months, sometimes longer – the key is recognizing it. Here’s a clue… it’s happening NOW.

After an 11-year bull market in stocks, the next asset shift has begun. The 2019 breakout in gold combined with loose monetary policy and negative bound interest rates suggests 2020 – 2030 will be a decade that heavily favors precious metals. Gold first, then silver and platinum will follow – palladium likely peaked.

Massive Demand Spike

The crashing stock market and global pandemic have triggered sudden and irreversible demand for precious metals. In the US, coin dealers sold out of ALL American Eagle coins (gold, silver, platinum) last weekend. Premiums have skyrocketed. There’s no putting the genie back in the bottle – an unprecedented shift to precious metals has begun.

Monthly Gold Target 

If gold comes back to test the $1350 – $1400 breakout area, that could be the last great buying opportunity of this decade. By the end of this decade, we expect gold to reach $7,500 – $10,000.

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A $7,500 – $10,000 price target for gold sounds absurd, I know. Before you dismiss it, let’s think about the potential triggers that could yield such lofty prices.

  • Loss in Confidence – A total collapse in confidence in Governments and their ability to manage. —> Very possible
  • Widespread Money Printing – Governments may resort to debt monetization and currency depreciation to inflate away record debt levels. —> Already occurring.
  • Speculation- A surging uptrend and new all-time highs in precious metals leads to the fear of missing out and sparks a speculative bubble. —> Likely, but probably years down the road.

Currently, our Gold Cycle Indicator is at 42 and entered maximum bottoming – suggesting gold may be approaching a bottom. I think it could drop further and perhaps reach a perfect score of zero in April or 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 – Picking the Bottom

I’ve been doing this for a while, and I’ve seen massive swings in precious metals. Through experience, I learned to be patient and to wait for an entry with defined risk. What do I mean by defined risk? I’m referring to a set entry and exit strategy with a calculated stop…not “well, let’s see what happens.”

Bottom Pickers Beware

When prices crash, as they have, there will always be those first brave souls ready to jump in headfirst. They are afraid of missing the bottom, so they go all-in. Nine times out of ten, that’s a poor decision.

This type of economic meltdown doesn’t end overnight. It will take several weeks to perhaps months for prices to stabilize. The first few rounds of bottom pickers will be chewed up and spit out. Once they are out of physical and mental capital – then the market will bottom.

Make A List

In the meantime, make a list of your favorite stocks. Remember, everything is on sale – not just precious metals. There are several quality stocks now paying dividends between 7% – 10%.

Our gold cycle indicator finished at 58 yesterday and in minimum bottoming territory. It could reach a perfect score of zero before gold puts in its final low.

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In summary, be patient. If you do buy now, consider a dollar-cost-average strategy. Keep some ammo in reserves – prices may drop further than you ever expected.

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 – Worst Case Scenario Confirmed

Gold reached our March $1700 target precisely and immediately started its decline. Last month I mentioned, the next correction in gold could be severe. I guess that was an understatement. Prices just breached the previous 6-month cycle low, and we have a failed cycle.

THE IDEAL TARGET

Despite plummeting prices, gold remains in a structural bull market. Regularly a trend will come back to test a breakout area. In the case of gold, that level is between $1350 and $1380. This is where I will be looking for support in the coming days/weeks.

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If you lived through the 2008 crash, then you should know what happens next. The severe panic encompassing the globe has sparked massive and immediate demand for precious metals. The largest coin dealer in America sold out of silver coins over the weekend. The US mint is out of silver eagles. This type of investor demand isn’t cured overnight.

Gold Cycle Indicator

Our proprietary gold cycle indicator peaked last Monday at 412. It reached minimum cycle bottoming and a score of 85 by Friday’s close. With gold prices now firmly below $1500, the GCI is nearing a score of zero.

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Precious metals formed a V-shaped bottom in 2008 when everything crashed. I think we will see the same thing this time. Be patient and pick your spots – the world is on sale.

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 Update – Demand For Gold is Exploding

  • What’s going on right now? There is a worldwide pandemic, and volatility is at 33-year highs.
  • What do people do whenever fear is high? They rush to precious metals! Human nature is very predictable.
  • What is insanely cheap right NOW and an excellent store of wealth? —–> Precious Metals!

I just called my dealer friend; she said precious metals are flying off the shelves, especially silver. Currently, there is a 3-business day delay on shipping due to the demand spike.

So, what does that mean? It means any decline now is likely temporary – no matter how scary it seems.

The COVID-19 crisis has shocked instant demand back into precious metals.

That was the missing element and will thrust us into the next stage of the gold bull market.

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 – Worst Case Scenario & The Next Great Buying Opportunity

I’m not sure which is more contagious right now, COVID-19, or the panic sweeping the markets. Currently, fear has a decisive lead.

Fear is Contagious

Never in human history has news traveled so fast. Social media spreads fear at the speed of light. Naturally, when confronted with a potentially harmful outcome, humans ALWAYS expect the worst and usually overreact.

As news spreads, inaccurate or partial information rushes from one person to another. Soon visions of a global plague overwhelm their consciousness, triggering the primal instincts of fear and greed. Individuals begin to hoard. Within hours stores run out of essential supplies. Survival instincts kick in, and civility is put on the back burner.

Sound familiar? Well, that was my experience at the local Costco this week. It started as a routine shopping trip, but by the time I left, I needed a shot of whiskey and a tranquilizer. People are crazy!

Remember Your ABC’s 

In med school, we learned to manage mass casualty situations. Back then, we used the acronym ABC for triage. It stood for airway, breathing, and circulation. I switched the acronym to Always-Be-Calm, knowing that if I maintained my composure, so should everybody else. Just like fear, peace is contagious

Coronavirus Update

Panic is spreading from continent to continent along with COVID-19. Instead of looking at the spread, I turn to the epicenter of the outbreak for insight. In China, only 22 new cases were reported overnight. That is a significant drop. The amount of new cases has declined sharply. I think the worst is over for China.

That is good news for the rest of the world. If these numbers continue to decline, China could be back to 90% capacity within the next month or two.

Gold Market Update

Why is gold lower, shouldn’t it be exploding higher? Great question! Two things are influencing gold currently. First, the futures market (paper contracts) got caught up in the liquidation that began late February. Secondly, the 6-month cycle that bottomed last November is rolling over, and gold is due for its cyclical correction.

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The Cycle Peak

Gold struck our $1700 target in March as predicted. And after a nice $250 rally, prices are preparing for the next decline. This is nothing new – gold makes a meaningful low approximately every 6-months.

Worst-Case Scenario 

Gold is in a new bull market – prices are not going to crash. As long as these idiots continue to push their modern monetary theory (MMT), there is no place for gold to go except higher. Sure, prices may dip here or there…that’s natural.

Under the worst-case scenario, I think gold could slip back to the breakout area around $1380, and that is ONLY if we slide into recession. A decline to that level would present a generational buying opportunity, especially in miners that would likely have been obliterated.

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Gold Cycle Indicator

Our Gold Cycle Indicator peaked at 412 on Tuesday and is declining. When the score dips below 100, I’ll begin looking for the next cycle low.

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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 – Expecting A Top Next Week

Trading gold can be terrifying, especially if you don’t understand cycles.

Finding the natural cycle of something is liberating, it bestows the gift of timing.

When I say the gift of timing, I mean knowing the suitable time to buy (when cycles are bottoming) or sell (when cycles are topping) any asset. Currently, the 6-month cycle in gold, that bottomed last November, has reached its final topping phase. It’s at this time we see a pickup in volatility and emotions run high.

Tricky Tops

As we approach the top, one strategy manipulators like to deploy is to run prices to marginal new highs. That triggers breakout buying and allows the manipulators’ adequate volume to offload their positions. Prices reverse a day or two later, leaving the poor and naive retail traders holding the bag.

Current Setup

I suspect gold will put in its official cycle peak sometime next week, likely within a day (+ or -) of next Wednesday’s Fed announcement (if gold didn’t already top at $1704). Remember, picking the exact top is a fool’s errand, don’t be cute. Prices met our March target between $1685 – $1730; it’s time to take profits and wait for the next opportunity.

The Next Buying Opportunity

If the cycles continue unabated, we should get a multi-week correction in precious metals lasting anywhere from 6 to 10-weeks. How deep prices correct depends on several unknowable factors – like is this a global recession, have interest rates stabilized, new government stimulus programs, etc.

Whatever the case, we think gold is in the 2nd inning of a 9-inning ball game. The party is just getting started. Anyone looking to accumulate physical metals should consider platinum and silver before gold as they are insanely undervalued.

If you have a few minutes, you may want to read my article explaining why physical demand for precious metals could skyrocket in 2020.

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 – Demand for Precious Metals About to Skyrocket

Last year the U.S. Mint produced the least amount of gold eagle coins in the programs 33-year history. Demand for precious metals has cratered, dropping some 85% since 2016. Our work supports a major shift in 2020 as financial fears wake investors from their complacent, pleasant slumber.

Thinking for Yourself

Unfortunately, the average investor rarely gets it right. They follow the herd, and like lemmings, plunge themselves over the cliff. They watch the news and do what everyone else is doing; that makes them feel comfortable. Only a precious few dare to think for themselves.

If you’re reading this, then perhaps you’re one of them.

Be Contrarian 

As an investor, I’ve made a living doing the opposite of what everyone else is doing. When everyone was talking about bitcoin in late 2017, I said it’s a bubble and about to burst. Prices peaked a week or two later and crashed to my $6000 target.

Contrarily, physical demand for precious metals was at rock bottom in 2019, even as gold broke above $1400 and confirmed a new bull market. Most investors were either unaware or asleep…that is changing as we speak. Fears over the coronavirus and a plunging stock market have awoken the sleeping giant – his name is “fear.” And with “fear” returning from hibernation, things are about change for precious metals.

I see a lot of anxiety in the precious metal community. With the crashing stock market and lower dollar, gold should be well-above our March $1700 target – it’s not. Silver also continues to lag, failing to make new highs before crashing to multi-week lows.

The 2020 Reflation Trade

Now, the good news. I think the 2003 SARS outbreak could shed some light on what to expect next. The SARS outbreak of 2003 peaked with the flu and began to decline with warmer weather. It’s too soon to know, but I expect the same fate for the coronavirus. The news tends to overplay the real threat level. As China goes back to work, the pent-up demand will slingshot an immediate need for materials and commodities leading to a second-half reflation. See the 2003 silver chart below for an example of what I think could happen.

Here is the silver chart from 2003 (highlighted section).

  • Silver fails to exceed prior years high
  • Price declines into the end of Q1
  • Prices consolidate into June before embarking on an 80%+ 10-month rally.

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I see a similar outcome for silver in 2020 to early 2021. If I’m correct, then by this time next year, silver should be testing $26.00 – $28.00.

Currently, our Gold Cycle Indicator is at 412, and we are anticipating a top in gold any day.

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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 – Gold Prices Hit $1700 Target, Now What?

Back in January, we laid out a path for gold to reach $1700+ in March. Our forecast was met with opposition, as gold was trading around $1550 at the time. Our analysis proved correct as gold struck $1704.30 earlier today. So, what’s next for the yellow metal?

Our system works off the 6-month cycle in gold. Not a lot of people realize this, but approximately every 6-months gold drops into an intermediate low. These lows typically provide an excellent medium-term entry in precious metals (silver and miners also follow this cycle).

Below is the gold chart from our January 17th post: Expect $1700+ After a Brief Pause. The previous 6-month low bottomed in November at $1446.20. In this article, I noted the MACD was crossing over and how that often signals a low. It proved timely as gold just bottomed at $1536.40.

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Gold Cycle Peaking

Gold is 4-months into a 6-month cycle, and prices are likely peaking. Our proprietary Gold Cycle Indicator (GCI) entered Maximum Topping. Reaching “Maximum Topping” doesn’t mean prices will peak immediately. It merely suggests the 6-month cycle is approaching maturity, and we should start planning for a top and the next buying opportunity.

In summary, gold met our March $1700 target, and the 6-month cycle is mature. However, prices could extend a bit higher, given today’s volatility. Nevertheless, intermediate-term traders should consider taking profits at this time.

The next 6-month low should arrive in late April to early May. Gold may succumb to the current market forces and decline further than most expect. That decline will set up the next great buying opportunity in precious metals.

Our Cycle Trade System is in cash and anxiously awaiting the next GCI buy signal.

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/

Market Crash Update – Gold Spikes To $1700 Target as Treasury Yields Plummet

Gold continues toward our March $1700 target as stocks and Treasury yields plummet.

In January, I posted: Gold Price Forecast – Don’t Miss the Next Leg Higher. At that time, I wrote, “A lot of investors remain bearish on gold expecting a deeper correction. Our work suggests the recent pullback is nearly over, and traders should prepare for fresh highs”. Below is the chart from that article.

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Note: Gold bottomed at $1536.40 on January 14th and followed our expectations precisely. Next, we are looking for a cycle peak. 

Gold Cycle Indicator 

Our proprietary gold cycle indicator (GCI) surged to 397 and is near maximum topping as I write. What does this mean? It means the 6-month cycle in gold is approaching maturity, and we should start preparing for a top. If gold is unable to break through $1690, we may have to consider the potential for a double top.

Intermediate Target

Below is the gold chart from our February 23rd Newsletter: I’ve drawn my preferred target box for a cycle peak in March. Of course, an unforeseen event could drive prices higher or lower than expected. My estimate suggests a target between $1685 – $1730. On the off chance, the coronavirus drives US stocks piercingly lower in March, then gold could extend to around $1785.

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Over the years, I’ve noticed gold likes to change trend in the opening days of a new month – often around the non-farm payroll numbers. With our cycle indicator approaching 400, I’ll be monitoring Friday’s price action closely.

Once this 6-month cycle peaks, we won’t expect the next significant buying opportunity in precious metals until late April or early 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 https://goldpredict.com/

Gold Price Forecast – Prices Likely Topped Last Week

Gold prices spiked to $1691.70 and just shy of our $1700 target before succumbing to last week’s market meltdown. The next buying opportunity should arrive in April or May.

Since mid-January, our call was for the 6-month cycle to peak around the $1700 level in early to mid-March. It appears gold peaked a week or two early but within our $1685 – $1730 price range.

Next, we will likely see some consolidation in precious metals digest yesterday’s emergency Fed rate cut and the growing economic concerns over the coronavirus.

Market Meltdown

I noted the potential for a stock market breakdown in our February 23rd Weekend Newsletter – “The MACD is diverging negatively, and I see the potential for a correction, possibly severe.” Shockingly, prices crashed (see chart below) and reached our target the very next week. Usually, these events take several weeks.

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In summary, gold is likely heading into the next 6-month cycle low. The commercial traders represented in the Commitment of Traders (COT) have massive shorts that need to be unwound, so it’s possible gold corrects deeper than most expect. Also, this year’s presidential election will be a significant driving force, likely adding to volatility. Long-term, we believe gold is going much higher, so any opportunity to buy near the 200-day MA is a gift.

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 – Why Are Gold Prices Crashing with Stocks?

Gold prices are crashing as we head into Friday’s close. The Fed may use its emergency powers to slash interest rates as soon as this weekend. A surprise rate cut could stabilize gold prices and stop this unjustified liquidation.

Trying to make sense of these markets is impossible. If I told you U.S. stocks would crash 14% in one week – how high would you expect gold prices to jump? $50…$100…$150? I would guess at least $100 but probably more. Nope – gold is down over $50.00 on Friday.

All week I’ve been monitoring the Fed Watch Tool for clues regarding interest rates. On Tuesday, the odds for a March 18th rate cut started at 14.4%, by the close they had jumped to 27.7%. As we head into the weekend, they’re now proposing a 100% chance for a 0.25% cut and a 47.2% chance for a 0.50% cut.

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Note: The odds for a .50% cut were 0% yesterday. The Fed could move as soon as this weekend. 

I try not to cry manipulation, but it’s hard to justify this week’s price action as natural. It seems several forces were at play, much out of our control. It appears someone wants the Fed to ease, and this week’s crash makes that possible. Sadly, many investors were hurt and shaken out of their positions in the process.

I don’t have a crystal ball, and I’m not sure what will happen next week. But I do know governments are running out of options to stimulate economies; interest rates are at all-time lows. All they have left is money printing, and that will lead to much higher precious metal prices.

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 – Did Gold Prices Peak?

Since January, we’ve been calling for Gold to reach $1700 by March. Prices hit $1691.70 on Monday before reversing sharply. The massive liquidation in stocks this week may have forced a premature top in Gold.

On Monday I wrote, Gold Nears $1700 Target as Stocks Plummet. Our Gold Cycle Indicator jumped to 405 and entered maximum topping, suggesting the 6-month cycle was nearing maturity. I assumed prices would stretch a little higher, but the ensuing market liquidation proved overwhelming.

Correction Target

If the gold cycle peaked at $1691.70, then I won’t expect the next 6-month low until late April or early May. Preliminary analysis supports a decline to $1480 – $1520.

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What could change our outlook? If stocks continue to plummet, then the Fed will be forced to cut interest rates, and that could put gold back on its feet. With the S&P 500 down 13.40% for the week (as I write), the Fed could announce something as soon as this weekend.

Don’t Let The Bull Throw You

Despite all the volatility, precious metals and miners are in long-term bull markets. There will be pullbacks and corrections, sometimes deep – don’t let these events shake you. The bull is powerful and will do its best to throw you. Grit your teeth, cinch down that flank strap, and decide not to be thrown.

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 – Gold Nears $1700 Target as Stocks Plummet

Gold surges toward our March $1700 target as the DOW plunges nearly 1,000 points.

In January, I posted: Gold Price Forecast – Don’t Miss the Next Leg Higher. At that time, I wrote, “A lot of investors remain bearish on gold expecting a deeper correction. Our work suggests the recent pullback is nearly over, and traders should prepare for fresh highs”. Below is the chart from that article.

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Note: Gold bottomed at $1536.40 on January 14th and followed our expectations precisely. Next, we are looking for a cycle peak. 

Gold Cycle Indicator 

Our proprietary gold cycle indicator (GCI) surged to 405 and entered maximum topping with today’s intra-day spike to $1691.70. Reaching maximum topping doesn’t mean prices will peak immediately. It merely suggests the 6-month cycle is approaching maturity, and we should start preparing for a top.

Intermediate Target

Below is the gold chart from our Weekend Newsletter: I’ve drawn my preferred target box for a cycle peak in March. Of course, an unforeseen event could drive prices higher or lower than expected. My estimate suggests a target between $1685 – $1730. On the off chance, the coronavirus drives US stocks piercingly lower in March, then gold could extend to around $1785.

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Note: Metals and miners often reverse or change trend in the opening days of a new month. With the GCI currently above 400, I’ll be monitoring the price action during the first week of March closely.

Our Cycle Trading System went long NUGT in December and USLV in January. I will look to exit these positions in the coming days once a peak becomes likely.

The next 6-month low is estimated for May 2020.

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 – Gold & Miners Confirm Recent Breakout

Gold is on track to reach our $1700 target earlier than expected – the breakout in miners confirms.

January was exceedingly boring for precious metals investors as the trend entered a prolonged consolidation. Sentiment was reset, and prices resumed the uptrend in February. Gold prices are surging and remain on schedule for our March $1700 target.

GDXJ (Pattern Complete)

The cup with handle formation in the junior mining ETF took longer than expected. Nevertheless, an upside breakout is now confirmed, and we have a minimum target of $50.00 with the potential for more.

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Daily Gold Chart 

Gold broke out of the 28-day consolidation, and a final surge into March is underway. Estimated target between $1685 – $1730, likely in the first 2-weeks of March. Once this cycle peaks, we expect a multi-week correction, into late April or early May.

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With Friday’s spike in gold futures above $1650, our Cycle Indicator entered minimum topping. Meaning, the cycle is likely approaching a peak within the next 1-3 weeks. I’ll look to take profits on our cycle trades once the GCI climbs above 400 (currently 358).

Our Cycle Trade System went long NUGT in December and USLV in January.

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 – The Surge To $1700 As Predicted

Gold has begun the final surge into its 6-month cycle peak. Prices could reach $1700 in March. From there, our work supports a multi-week correction, possibly severe, into May.

It took some time, but I think the market finally realizes the escalating implications of the coronavirus. On Monday, Apple announced they would not meet quarterly guidance due to lower production and demand. That captured investor’s attention and triggered a move into gold.

Last week I wrote, “A daily close above $1600 in the coming days will trigger the next advance to around $1700 before prices enter a more severe correction.” Prices are currently above $1600 and appear to be breaking out.

Gold Daily Chart

The mid-cycle consolidation is complete, and gold is beginning the final surge into a 6-month cycle peak. Our preferred target is $1700. Once prices peak, our work supports a multi-week correction, possibly severe, into May.

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Silver Daily Chart

I was expecting a much stronger run out of silver, but the coronavirus likely thwarted that. Nevertheless, silver likes to finish strong, and I still see the potential for a sharp rally to $20.00 in March.

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A rally above $20.00 in silver would advance the series of higher highs and higher lows and confirm a bull market. Longer-term, I expect silver to go much higher.

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/