Gold Forecast: Gold Prices Pulling Back, Trend Points Higher

Gold prices are pulling back after rising nearly $200 in December. The drop should be brief before turning back higher. There are too many factors supporting gold long-term to keep prices low for long.

GOLD DAILY: This appears to be a simple mid-cycle pullback after testing resistance surrounding $1960. Prices usually find support around the 20-day MA (currently $1881.74). The initial pullback out of a fresh 6-month low can be scary. Try to stay focused on long-term goals.

 

GOLD 4-HOUR CHART: I’d like to see the 4-hour gold chart hold support around the previous breakout line (approx. $1888) and turn higher after the job numbers. A continued breakdown after the 8:30 employment report could trigger a deeper pullback to $1820 – $1860. Today’s close is important.

 

Silver and Platinum are leading gold and should outperform gold in 2021. Our educational metals portfolio is long GDXJ, SILJ, GDX.

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. He posts daily updates to Premium Members. For more information, please visit here.

 

 

 

Gold Price Forecast – Gold Prices Confirming Breakout, Silver and Platinum Leading

In last Wednesday’s gold update, I noted the likelihood of a November bottom and a pending breakout in precious metals. Gold is breaking higher confirming that outlook and the potential for an advance towards $2300. The trends in silver and platinum are even more bullish and could explode higher.

GOLD DAILY

The daily chart of gold has broken clearly above the intermediate trendline, confirming a cycle breakout and subsequent 6-month low in late November. Precious metals should rally into at least March, but April or May is more likely before correcting into the next 6-month low. My minimum target for this advance is $2300.

SILVER DAILY

Silver is also confirming a cycle breakout. The bullish divergence in late November (prices remained above the September high) suggests robust momentum behind silver moving into this advance. Consequently, I think prices could surge sharply higher over the next 3 to 4-months. I have a minimum target of $35.00, but $42.00 or higher is a real possibility by April or May.

PLATINUM DAILY

Platinum diverged even more bullishly than silver, building the potential for a powerful advance. In late November, when gold dropped to new lows, platinum hit fresh highs. Once above $1200, we could see $1500+ easily by April or May. Historically, the price of platinum trades well-above that of gold, so we have a lot of catching up to do.

Georgia Senate Update

The Georgia Senate race has tightened to nearly a coinflip compared to the 68% to 35% reported last Tuesday. If the Dems win both seats (currently 49% odds), that will change things from a divided government to one that is united. The Dems, if in control, would increase spending and stimulus, but with that comes the potential for higher taxes, which corporations hate. If they win, I suspect the likelihood of higher taxes could be enough to trigger a correction in stocks.

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https://www.predictit.org/

Also, several Senators said they would dispute President Trump’s election loss when Congress reconvenes on Wednesday. That opens the door for an investigation into claims of election fraud. It is unclear how this will play out, but if there is a genuine investigation, then that too could cause market uncertainty and a possible correction.

Silver and Platinum are leading gold and should outperform gold in 2021. Our educational metals portfolio is long GDXJ, SILJ, GDX.

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. He posts daily updates to Premium Members. For more information, please visit here.

Gold Price Forecast: Market Risks and Why 2021 Could be Worse

I’ve grown a little bearish over the near-term, given the excessive bullishness I see in options buying and retail trading. Highflyers like Tesla and Bitcoin are not driven by fundamentals, but by speculation and excess liquidity. This extreme risk-taking leaves the markets vulnerable to a sharp correction, in my opinion.

It seems most of the “good news” is already baked into the markets. Governments passed more stimulus, and vaccines are making their way across the globe. Stocks are at new all-time highs and there’s talk about a repeat of the roaring 20s. However, what’s happening in the real economy is entirely different. I don’t think we will understand the depth of this divide until next year. Below are some “potential hazards” I see going into next year.

EVICTIONS AND FORECLOSURES

According to a recent survey by the US Census Bureau, of the estimated 17-million adults who are not current on their rent or mortgage payments, 33% could face eviction or foreclosure in the coming months.

(Source: visualcapitalist.com)

Eventually, moratoriums will be lifted, and people will need to start paying rent/mortgages. By the end of next year, I expect to see foreclosures popping up in some cities. Increased housing inventory could lead to lower prices and perhaps a housing glut. Rural housing should do better as people migrate out of cities to safer and more spacious arrangements.

COMMERCIAL REAL ESTATE

How many restaurants, shops, malls, hotels, etc., won’t reopen in 2021? How many office buildings will remain vacant as employees work from home? How many commercial leases won’t be renewed? How many tenants walked away from their facility/business, never to return? Eventually, this could lead to a massive restructuring of commercial assets and could take years to unwind.

LOST TAX REVENUE

The long-term tax outlook for major cities is bleak. As employees work from home, they will no longer commute into the city. Tax revenues could plunge as companies and residents flee high tax states. Municipalities will be forced to raise taxes or slash services (probably both). Consequently, the exodus from states like California to low tax states like Texas will only make matters worse.

BANKRUPTCIES AND DEFAULTS

How many of the struggles mentioned above will result in bankruptcies and defaults? Hard to say, but I believe it will be significant. Going into the crisis, the personal savings rate was low. Millions of Americans didn’t have enough savings for even 3-months of expenses. When stimulus and employment benefits run out, I think there will be a reckoning, and we won’t know how bad until next year.

K-SHAPE RECOVERY

Currently, the markets are pricing in a V-shaped recovery. I am less optimistic for the reasons described throughout this report. One scenario I am considering is a K-shaped recovery. This occurs when people with assets (own stocks and real estate) get wealthier through asset inflation, while those without assets (the have-nots) struggle to find employment, lose skills, and become permanently unemployed. As a result, the wealth-gap widens and produces increased social and civil unrest.

CYBER ATTACKS

A few weeks ago, SolarWinds – a major US information technology firm, was the subject of a cyberattack that spread to its clients, including the US government. Foreign hackers used it to spy on private companies like cybersecurity firm FireEye and other Government agencies (Homeland Security and Treasury Department). It was the largest cyber-attack in US history, according to experts.

The combination of supercomputers and artificial intelligence makes cyber-attacks a threat like never before. No longer is it a single hacker in a basement trying to breach a firewall. Today, supercomputers are doing the hacking – they don’t need to sleep, they don’t eat, and they don’t get paid. They work 24-hours a day, relentlessly probing systems for weakness.

An attack on the power system, electrical grid, oil refineries, etc., could cripple utilities and infrastructure. If the payment system goes down, no one would be able to use credit or debit cards. For that reason alone, it’s probably wise to have some cash on hand to pay for essentials in the event of an outage.

VACCINE EFFECTIVENESS

There is a lot of hope riding on the effectiveness of these vaccines. The Pfizer and Moderna vaccines are reported to be about 95% effective. What if, for some reason, they aren’t?

We’ve had some very smart people working on the flu vaccines for over 20-years. On average, the flu vaccine is only about 60% effective, and some years just 40%. To create and distribute a new vaccine that is 95% effective…in less than 12-months would be game-changing if it works. And perhaps that’s what this is, a major scientific breakthrough, I don’t know. But, until I see long-term data supporting this, I remain skeptical.

In summary, the global economy has recovered significantly from the collapse. The stimulus provided by governments was massive, but it is wearing off. If the vaccines prove effective and the economy reopens, we could see above-average growth next year. However, there are significant hurdles to overcome. If the vaccines are less effective and the lockdowns remain, I believe we are at risk of a double-dip recession.

GOLD OUTLOOK

Sentiment turned positive for precious metals in 2020 after the global pandemic. Fear and uncertainty will remain for the next several years. Governments are printing staggering amounts of money, and this will ultimately lead to inflation. Gold will benefit as currencies are devalued. Precious metals and commodities are entering a bull market that could last over a decade, in my opinion.

The only way I see gold NOT doing well in 2021 is if the vaccines prove 95% effective (as claimed), reach wide-spread adoption (at record pace), and completely eradicate the coronavirus. I think the odds of that happening are pretty low.

The Gold Cycle Indicator finished at 97. I’m still looking for a finish above 100 to establish a cycle breakout.

 

-US DOLLAR- As I mentioned in the recent dollar update: I think prices are experiencing a meaningful devaluation. The trend is overdue for a bounce, but prices keep pushing lower. The final area of support arrives at the 2018 low of 88.15. If that level fails, I believe the USD could collapse to 80 by April/May 2021.

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-GOLD- The 6-month cycle in gold likely bottomed at $1767.20 in November. Prices are climbing the “wall of worry,” and I expect a breakout above the intermediate trendline within the next 1 to 3-weeks. The trigger event to push gold through the trendline could arrive any day. The minimum target on a breakout is $2300 for the next leg higher.

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Thanks for a great 2020 and happy New Year!

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. He posts daily updates to Premium Members. For more information, please visit here.

Gold Price Forecast – Collapsing Dollar Could Push Gold to $2300 by May 2021

DOLLAR DAILY

I think the dollar is experiencing a meaningful devaluation. Prices are extremely overdue for a bounce, but the trend pushes persistently lower. The final area of support arrives at the 2018 low of 88.15. If that level fails, I believe the USD could collapse to 80 by April/May 2021.

DOLLAR MONTHLY

We are in a similar setup to the post-trendline breakdown of gold in 2002/2003. Consequently, I believe the dollar is on the verge of an accelerated decline towards 80. The weakening dollar should push gold higher into April/May 2021 before the next 6-month cycle correction.

In 2002/2003, the US was coming out of recession, just like now. The recent $900-billion relief package will not be the last. I expect one or two more programs next year – this should continue to deflate the dollar and push hard assets higher.

MEDIUM-TERM GOLD FORECAST

GOLD DAILY

The 6-month cycle in gold likely bottomed at $1767.20 in November. Prices are climbing the “wall of worry,” and I expect a breakout above the intermediate trendline within the next 1 to 3-weeks. The trigger event to push gold through the trendline could arrive any day, but the time surrounding the January 5th run-off election in Georgia is of particular interest. The minimum target on a breakout is $2300 for this leg higher.

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Note- Silver and Platinum are leading gold and should outperform gold in 2021. Our educational metals portfolio is long GDXJ, SILJ, GDX.

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. He posts daily updates to Premium Members. For more information, please visit here.

Gold Forecast – Precious Metals and Mining Breakout Forecast

The US government will shut down Saturday, and 12-million people will lose their unemployment benefits on December 26 if Congress fails to pass a new stimulus package. They are currently negotiating a $900-billion agreement.

The near-term fate of metals and miners hangs in the balance:

  • If Congress passes a deal (weaker dollar), gold will likely continue higher and forgo the December decline.
  • If Congress fails to reach the $900-billion solution, metals and miners would likely turn immediately lower and proceed to our December targets.

The next 24 to 48-hours are critical. Congress may work over the weekend to reach a deal, so we may have to wait until Monday for a decision.

DOLLAR WEAKNESS: The dollar has been exceptionally weak, and prices have been unable to rally out of the most recent low. This supports the potential for a breakout in precious metals.

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DOLLAR MONTHLY CHART: The persistent weakness in the dollar is like what we experienced in 2002 and 2003. The monthly chart has broken the multi-year trendline, paused, and is continuing lower. At this rate, I decline to 80 seems likely by the first half of 2021. Closing below 88.15 would confirm a bearish breakdown towards 80.00.

 

CALIFORNIA COVID SPIKE: California reported 61,569 new daily cases yesterday. The day before was 35,547. I’m not sure what caused the recent spike, perhaps something with testing. Nevertheless, if daily cases stay above 50,000 for any length of time, that can pose real problems for their healthcare system. Covid remains a major threat.

https://www.worldometers.info/coronavirus/usa/california/

The Gold Cycle Indicator is at a critical level. Consecutive finishes above 100 would support a bullish breakout and a 6-month low in precious metals – it finished at 98 today.

 

-GOLD- Gold closed above the $1880 level. I’ve said progressive closes above the $1880 level would support a 6-month low and bullish breakout. We got one close today. However, I neglected to mention the intermediate trendline in prior posts. From a technical standpoint, closing above the intermediate trendline (currently above $1925) is the proper confirmation of a breakout.

Note- The bullish engulfing candles on December 1 and December 15 support the bullish breakout scenario.

SILVER– For a breakout in silver, I’ve been looking for progressive closes above the November $26.14 high – we got one today. Prices are also testing the intermediate trendline, and a close above $26.30 would prescribe a bullish breakout.

Bullish Note- Silver diverged from gold in late November and made a higher high. If silver confirms a bullish breakout, I think it could move sharply higher, outpacing gold during this cycle advance.

PLATINUM– Another bullish sign I’m contemplating is the divergence in platinum. Prices rallied to new highs ahead of gold and silver. That could be an incredibly bullish sign if metals and miners confirm breakouts in the coming days. Closing above $1093.10 would support a run to fresh highs.

-GDX- Miners gapped higher at the open and finished above December 7 $36.92 high. I see the potential for a bullish breakout if prices maintain today’s gap and do not close below the 200-day MA (currently $35.88). Any reversal that settles below the 200-day would recommend a bearish reversal and maintain the outlook for one more decline in December.

-GDXJ- Juniors gapped higher at the open and finished above the December 7 high. As long as prices maintain today’s gap (do not close below $53.00), I see the potential for a bullish breakout. A close above the intermediate trendline (currently $58.00) would confirm a new cycle advance.

-SILJ- The silver junior mining ETF closed above the intermediate trendline supporting the bullish argument for silver. I see the potential for a breakout as long as prices don’t close below $15.00.

Bitcoin is at new all-time highs, and it could top any day. I have the same feeling about it as I do Tesla – both have a bubble feel. Speaking of Tesla, the days surrounding the December 21 addition into the S&P 500 are of particular interest and could time a peak, just something I’m considering.

In summary, the near-term fate of precious metals and miners hinges on the ability of Congress to reach a deal. On the one hand, I thank they can and should, but on the other, I have little faith in the political establishment.

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 Forecast – Gold Price Supporting a Bullish Breakout

  • Gold is trading above last week’s high ($1880), and the dollar is down sharply. Closing above the intermediate trendline near $1925 would register a breakout (green arrow).
  • Failing to breakout above $1925 would promote a return down to the $1750 level by year-end (red arrow). We should know which scenario is unfolding within the next 1 to 3-trading days.

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The Stimulus Saga

Congress has been attempting to pass a second round of stimulus since October. Each time, the lead politicians optimistically say a deal is close (gold rallies), and each time the negotiations fall apart (gold collapses). Will this time be different? I am not sure, but the dollar is acting like a bill will pass.

Eliminating Emotions

The precious metal markets are incredibly volatile and heavily manipulated. One moment prices are surging higher, a few hours later – prices are collapsing and vice versa. It happens time and time again. That is why it’s important to have breakout levels.

It is hard to say what will happen over the next few days, but I will update members each step of the way. Also, the days following a Fed meeting are often tricky and filled with volatility, so be careful.

Note- We issued a Gap Strategy long trade in GDX to Premium Members at today’s open.

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 – Final Buying Opportunity Expected in December

If established, the upcoming December low could turn out to be one of the last great buying opportunities. Precious metals are expected to reach fresh highs in April/May 2021.

Gold price spiked to $2089.20 in August before entering a multi-month corrective phase. Our Gold Cycle Indicator (GCI) triggered an initial buy signal on November 23, 2020, and again on November 27, I began adding to our Premium Metals Portfolio then. As long as the cycle indicator (currently 78) remains below 100, we expect one more decline in December to complete our asset purchases.

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GOLD

Gold bounced after making an interim low last week at $1767.20. Prices backtested the $1850 breakdown last Friday, and this is where we could see the final plunge into a very extended 6-month cycle low. Gold would have to close progressively above $1860 or push the Gold Cycle Indicator back above 100 to nullify the one more drop scenario.

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SILVER

Our work continues to look for one more decline in silver to our target box. Closing below $22.00 would confirm this outlook. Otherwise, prices would have to finish above the November high ($26.14) to recommend a 6-month low and bullish breakout.

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GDX

Closing below last Tuesday’s gap ($34.68) would support a breakdown and perhaps a brief spike below the $31.00 area in December before miner’s bottom.

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In 2021, gold could reach $2300 and perhaps as high as $3500, depending on geopolitical developments. I am even more bullish on silver, platinum, and gold 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. He posts daily updates to Premium Members. For more information, please visit here.

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

Gold Price Forecast – Global Great Depression by 2022?

As an analyst, I am continually looking for rogue waves and black swan events. In my experience, it is the crisis we do not see coming that hurts us most. Over the last few months, I have seen and heard some things that now have me concerned. I will describe them below, and you can decide for yourself if they are worth considering.

THE ROBINHOOD CRAZE

Buying and selling stocks has never been easier. Through Robinhood, investors (primarily millennials) buy and sell stocks commission-free with ease. Users are encouraged to sign up friends and family to receive free stocks. I believe this craze has triggered a bubble in stocks like Tesla and other Electric Vehicle plays.

TRADING IS EASY

Since August, I have had multiple conversations with people (mostly younger) regarding stocks – the majority have never talked markets before. I found out one is actively day trading from his phone; he buys popular stocks, and when he makes $1000, he sells. Another was bragging about a 50%+ profit on Cruise lines. Some went as far as to show me their phones and how much they have made. One family member went on to described how he wanted to learn options.

Virtually anyone that bought stocks after March is wildly profitable. People that have never traded before are doing so actively. Retail traders are entering the options market like never before – this has me greatly concerned. Either all these people are financial geniuses, or they are about to get wiped out from an unexpected market event.

BULLISH SENTIMENT

Even the professionals are bullish. According to thedailyshot.com, the Financial Twitter Sentiment Index is experiencing notable bullishness – even perma-bears have turned bullish! Is everyone right, or should we view this as a contrary indicator?

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MARTIN ARMSTRONG WARNING

Well-respected analyst, Martin Armstrong of Armstrong Economics, noted in a recent interview the potential for revolution, civil war, and a global depression global by 2022. The interview titled We’re Headed for Revolution, aired November 19, 2020 on Financial Sense.

To paraphrase: Mr. Armstrong sees the potential for violent protests and blood in the streets by April or May 2021, possibly over continued lockdowns. That is correct – he thinks lockdowns may continue in 2021, over a different (perhaps evolving coronavirus). From there, we could see the beginnings of revolution in some countries. By 2022, he thinks global GDP could be down by 50%, from the pre-COVID high. I have been listening to Mr. Armstrong for years. He is right more than he is wrong, in my opinion.

Under this frightful scenario, precious metals would likely explode higher (me talking). The dollar could rise as a flight to safety, especially if revolution begins overseas first. Big money will park in blue-chip stocks. And cryptocurrencies could rally as investors attempt to move money out of their respective countries.

SUMMARY

In summary, multiple warning signs have my attention. Maybe there is nothing to worry about, and the economy will continue to recover. But what we are in the eye of the storm, and things get worse in 2021 – how many people are expecting that? Whatever the case, I think it is worth considering the potential for a very tumultuous 2021 and 2022…at least think about it.

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. He posts daily updates to Premium Members. For more information, please visit here.

 

Gold Price Forecast – Are Precious Metals Starting a 10-Year Bull Market?

COMMODITIES UNDERVALUED VERSUS STOCKS

THE CRB vs. DOW: I believe commodities reached a major inflection point in 2020 triggered by the coronavirus. We saw similar periods of commodity outperformance during the 1970s and 2000s. I believe precious metals and commodities are starting another bull market that could last well into 2030.

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GOLD LONG-TERM: From a technical set up, I believe we are in a similar position to 2004. Though gold could drop a little further near-term, I think prices are going much higher over the next 10-years.

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NEAR-TERM FORECAST

GOLD

Gold closed below the $1850 support level and confirmed the bearish scenario outlined in last week’s report. Ultimately, I believe prices could stay under pressure for another month. Prices are expected to reach $1750 and perhaps as low as $1670 in December. Longer-term, buying gold at or below the rising 200-day MA is historically a favorable opportunity.

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SILVER

Silver has held up better than gold and remains above its September low. Ultimately, I believe prices will test the 200-day MA (currently $20.62) with a spike to $19.00 or lower possible in December. This is shaping up to be an excellent long-term buying opportunity, in my opinion.

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PLATINUM

I find the price action in platinum intriguing. Prices are rising as gold and silver are breaking decisively lower. There is still a chance prices will reach our target in December, but if prices continue to defy the odds and rally above $1050, then I think they will go much higher. To support a near-term breakdown, prices need to close below $900.

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XLE

With money rushing back into risk markets, energy stocks have exploded higher. The potential for a double bottom lessens with each day prices remain above the 200-day MA. I became bullish on energy in October and labeled the sector a generational buying opportunity. With major inflationary forces as a tailwind, I think they could go much higher. I’m considering adding an energy portfolio to our premium services. I’m patiently waiting for a pullback to buy more.

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In summary, I believe precious metals have reached long-term buying opportunities. I believe the commodity bull market is just getting started and could last for ten or more years. To reduce stress and maximize profits, I designed the gold cycle indicator and began the Gold Predict educational portfolio.

For long-term success, I believe one should find a sector that is just starting a new bull market…take your seat on that train and stay on as long as possible.

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. He posts daily updates to Premium Members. For more information, please visit here.

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

Gold Forecast – Gold Indicator Triggers Buy Signal

Gold is in the later stages of a decline that began in August. Our Gold Cycle Indicator is below 100, supporting a near-term entry. Gold could dip below $1700 in December, as outlined in our recent gold update. However, we see sharply higher prices in 2021.

The 6-Month Gold Cycle

Gold goes through the same process (rally-top-decline) approximately every 6-months. With each phase, we see the following “emotional benchmarks.” Becoming aware of them could make you a better investor.

  • Near the Cycle Top: Retail traders are overleveraged. They only read articles that confirm their outlook (confirmation bias). They devise reasons why prices can only go higher, enlisting the fear of missing out (FOMO).

 

  • Bearish Breakdown: A bearish breakdown arrives when critical support is violated, and retail traders rush to the exits to preserve profits or limit mounting losses. Often, extreme selling morphs into panic – retail traders turn bearish.

 

  • Near the Cycle Bottom: Everyone bullish 3-months ago is now finding reasons why prices will continue to drop. They read bearish articles supporting ever-lower prices. Prices bottom a few days/weeks later, and they are caught on the wrong side, once again.

With the recent breakdown below $1850, I believe gold is approaching a cycle bottom. The Gold Cycle Indicator and Educational Portfolio were designed to simplify investing via a long-term buy and hold strategy.

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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 Forecast – Gold Following Bearish Scenario

As I mentioned in our previous article, gold is following the 2016 post-election price pattern. Breaking below support at $1850 established a near-term breakdown, and prices could decline even further in December. Gold could dip below $1700 before finally securing a bottom.

GOLD DAILY CHART

The breakdown below $1850 is underway. Prices are likely to pause near the 200-day MA as bulls attempt to build a bottom. If gold continues to slide below $1800, then it could proceed towards $1750 and perhaps even $1670 before bottoming in December.

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Why Is Gold Declining

Multiple pharmaceutical companies have announced positive vaccine results. Investors and institutions are becoming optimistic and are starting to see life beyond COVID-19. They are taking profits on precious metal positions and rotating into extremely undervalued sectors like energy. I became aggressively bullish on energy in October, and the XLE is up over 40% since the recent low.

Bullish Factors Supporting Gold

Gold (precious metals) will not stay low for long, in my opinion. With lockdowns resuming, unemployment claims are sure to rise. A double-dip recession is a near certainty without more stimulus. When more stimulus becomes apparent, gold will respond accordingly (rally sharply). I expect much higher gold prices in 2021 and throughout this decade. Any decline now should be considered a gift and a long-term buying opportunity.

Note- Our educational portfolio began selective buying of precious metal assets on Monday.

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 Forecast – Gold Must Hold Critical Support Near $1850

If gold breaks below $1850 sooner than later, that could open the door for an extended correction into December.

Overall, precious metals are in structural bull markets, and sharp pullbacks are considered long-term buying opportunities.

I do not mean to come across as overly bearish, but the post-election weakness in gold has me concerned. In fact, it is very similar to what we saw in 2016. Patterns do not always repeat, but it would be careless not to mention this possibility. The $1850 level is crucial going into next week.

Our gold cycle indicator finished the week at 106. We are very close to entering minimum cycle bottoming.

GOLD 2016

Gold prices behaved in a similar manner surrounding the 2016 presidential election (lots of whipsaws, fake-outs, and consolidation). Breaking the pre-election low ($1243.20) in November triggered a frustrating grind lower into December.

GOLD 2020

The price action in 2016 is very similar to now. If gold breaks below $1850 in the coming days, I see the potential for a deeper correction into December that tests the June low.

A sustained breakdown below $1850 could trigger a slow grind lower into December (based on the 2016 pattern). In this scenario, prices could dip briefly below $1700.

Factors Supporting the Bearish Scenario

Investor Sentiment:

Anybody that bought gold in August, September, October, or November is now losing money. Breaking the September low ($1850) could trigger a cascade of sell orders turning bulls into bears. That would provide the bearish sentiment required for a proper 6-month low.

Money Rotation:

With positive vaccine results from Pfizer and Moderna and a Democratic sweep off the table – money appears to be rotating out of gold and into undervalued sectors like energy. I turned very bullish on Energy in October.

Note: There are too many bullish factors supporting gold long-term. If prices do follow the more bearish scenario, prices will not stay long low for long, in my opinion.

SILVER

A breakdown in silver below $23.00 would support the final decline to our target. If gold follows the most bearish scenario (mentioned above), silver could spike down briefly to around $18.00.

PLATINUM

In my note to premium members on Friday, I mentioned how platinum sometimes spikes to a fresh high without gold just before it breaks lower. That could be happening again. Overall, I continue to look for a target between $750 and $800. Note – If prices continue to rise above $1050, then it’s probably going much higher.

GDX

Senior miners are leading the sector lower. If gold breaks below $1850, GDX could test the June low around $31.00 or lower before prices bottom. In my opinion, buying miners at or below the 200-day MA is a long-term buying opportunity.

GDXJ

Juniors struck fresh lows and are hovering just above the 200-day MA. It’s hard saying how far prices could drop if gold and silver follow the bearish scenario. A drop to $42.00 or lower is possible.

The Key Level Next Week is $1850

If gold stays above it, then great – we will just consolidate a bit longer. But if gold breaks below $1850, that could trigger the near-term bearish scenario mentioned above.

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 – Surging Hospitalization Rates Will Trigger More Lockdowns

THE SECOND WAVE OF COVID

Coronavirus cases are on the rise, and I do not see this trend slowing. New daily cases in the US reached 187,907 on Friday – a surge of 80% in just two weeks. The Midwest is being hit particularly hard.

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https://www.worldometers.info/coronavirus/country/us/

Some argue that the surge in daily cases is because of more testing. True, but what concerns me is hospitalizations. The graph below shows that COVID-19 hospitalizations rose to 69,455 and broke out above the initial April and July peaks.

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https://covidtracking.com/data/charts/us-currently-hospitalized

The regional hospitalization map shows a spike in the Midwest (recently 23,849) and more than double the May 6th peak of 11,483. It is important to note that there is a 2 to 4-week lag from when someone tests positive to hospitalization – suggesting the current spike could continue into late November. As hospital resources are overwhelmed, governments will enforce lockdowns and issue new stay-at-home orders.

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https://covidtracking.com/data/charts/regional-current-hospitalizations

Death rates in the Midwest are also reaching new highs. Considering the lag time (mentioned above), this trend is likely to increase over the next several weeks. The Midwest is likely to resume lockdowns soon, and that could send stocks sharply lower.

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 https://covidtracking.com/data/charts/regional-deaths

GOLD

Gold formed an inverted cycle peak in the November timing window, pushing the 6-month target out to December. Gold could bounce here or there, but the intermediate trend is lower. Volatile price swings will continue over developments on the vaccine front, elections, and resumed lockdowns. I do not recommend trading these swings; they are too unpredictable. Our overall forecast supports a decline to around $1750 or lower by year-end.

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Note

The days surrounding December 29th, 2020, are of particular interest and could time the next major low in gold. We are very bullish long-term and believe gold will exceed $10,000 this decade.

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 Forecast – Gold Prices Approaching Minimum Target

These whipsaws have certainly destroyed trading accounts. Thankfully, the pain could be over soon as our gold cycle indicator is finally starting to support a bottom.

GOLD DAILY CHART

Technically, we are still in the timing band for the original 6-month low (late October to first 2-weeks of November). So, if gold reaches $1790 – $1820 by Friday, then a bottom is possible this week. However, if prices do not reach $1820 or lower by Friday, then we could be in for more consolidation and perhaps a deeper low ($1740 – $1760) in the last half of December (the red ABC correction). The next 48-hours are crucial.

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With the gold cycle indicator (GCI) nearing minimum cycle bottoming, we could see a bottom any day. The last time the GCI fell below 100 was in March. On Wednesday, it finished at 114. Note- minimum cycle bottoming means prices have met the minimum technical requirements for a 6-month low – prices could drop further.

Our educational portfolio for premium members uses an accumulation strategy based on GCI readings. In a nutshell, when it drops below 100, I begin adding to our precious metal’s portfolio. It was designed to take the stress out of trading.

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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 Miners Update – Updated GDX Price Target

Our cycles supported a turning point in precious metals around November 6th (+/- a few trading days). I assumed it would time a low. Today’s market action suggests that instead of a low – gold inverted and probably formed a high overnight. Below is our updated price target(s) for GDX.

GDX DAILY: Prices reversed at the gap, and I am glad we waited for confirmation before committing to new positions. If gold continues to collapse below $1850 (likely), I think GDX will reach $34.00 to $35.00 near-term, and perhaps $31.00 – $33.00 in December. Reaching the December target would represent an incredible buying opportunity, in my opinion.

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Click here to view our article- Gold Price Forecast: Gold Price Target’s $1750

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 Price Target’s $1750

Our cycles supported a turning point in precious metals around November 6th (+/- a few trading days). I assumed it would time a low aligned with our 6-month target. Today’s market action to the vaccine suggests that instead of a low – gold inverted and formed a high overnight. The election fiasco kept gold elevated long enough to force the cycle to invert. Subsequently, gold pushed its 6-month low into the last half of December.

GOLD 4-HOUR: Gold prices plummet after Pfizer announced a vaccine that was reported to be 90% effective. This news event forced an inverted cycle, and we expect an initial collapse to $1810 – $1820 (beginning now).

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Updated 6-Month Target: Today’s inverted cycle peak supports a December target surrounding $1750 for an ABC measured correction. At least that is my initial impression, given today’s action. We will know more over the next 48-hours.

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After an initial collapse to $1810 – $1820 (beginning now). We could see a 3 to 4-week consolidation followed by and a final drop in the last half of December.

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. He posts daily updates to Premium Members. For more information, please visit here.

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

Oil Stocks – Buying Opportunity of a Lifetime

There is no sector more unloved than energy. The relentless bear market forced oil companies to slash exploration projects. We believe this could lead to an unforeseen supply crunch in 2021 as demand surges as global economies recovers.

Quantitative Easing

Can governments print endless amounts of money without causing inflation? Not usually. However, they did get away with it (for the most part) during the 2008 crisis. Back then, the money stayed on bank balance sheets, mostly. This time, the money is entering the system, and there is a lot more of it. This could lead to a perfect storm for higher oil prices this decade and perhaps a generational buying opportunity in stocks.

THE RETURN OF INFLATION

The last time inflation was out of control was during the 1970s. In an inflationary period, investors flee fixed income for assets with inflation protection (real assets and commodities). It does not make sense to be locked into a Treasury yielding 0.7% if inflation annualized is much higher. As a result, investors flee stocks and bonds for hard assets.

I believe the annual inflation rate exceeded 8% in the 70s. By 1979 nobody wanted to own Stocks or Bonds – no matter what they were yielding. Treasuries were considered “certificates of confiscation.” BusinessWeek’s August 1979 issue was titled: The Death of Equities – how inflation is destroying the stock market. At that time, 30-year Treasuries were approaching yields of 10%…no one wanted them (sound like energy today). That period turned out to be a generational buying opportunity for both stocks and bonds.

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IS INFLATION DEAD?

Fast-forward 40-years, and here we are again. However, this time the opposite is true. The April 22, 2019 issue of BusinessWeek asks – Is Inflation Dead? with an image of a deflated Dinosaur, i.e., energy. Could this be another contrary indicator? I believe it is, and I think we are on the verge of a new inflation.

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The Bear Market in Energy

Energy has been in a terrible bear market for over 6-years. Producers cut their drilling and exploration projects to almost nothing. Remember, it takes several years from the time of discovery to create a producing well. As demand returns, I believe a lack of supply could lead to shortages later this decade.

Increased Demand 

The global pandemic has reinforced the need to secure supply chains. A global rebuilding effort will result in massive onshoring projects of critical supplies. The infrastructure required and retooling will require a tremendous amount of fossil fuels. Ultimately, I think oil will reach new all-time highs in the 2020s.

Conclusion: Oil is one of the most valuable commodities on the planet. Without energy (oil, coal, uranium, and natural gas), the world would stop. It is essential to everything we do. I do not see how we can have inflation without much higher energy prices. Consequently, I am betting big on an energy comeback.

I started buying energy aggressively in October 2020. Prices could dip a bit further, depending on the elections and more lockdowns. I will continue to accumulate if prices decline.

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. He posts daily updates to Premium Members. For more information, please visit here.

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

 

Gold Forecast – Gold Starting Next Major Advance

After peaking in August, gold began a multi-month correction into a 6-month low. The bottom appears in, and gold could be starting a new multi-month advance. If silver and miners confirm, we think gold could reach $2300 by January 2021.

-GOLD DAILY- Gold closed above the intermediate trendline as well its October high ($1939.40) on Thursday. This development supports a divergent low in late October at $1859.20 and a new multi-month advance.

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Note- A divergent low occurs when one asset reaches its cycle targets while other, like assets, do not. In this case, both mining ETFs (GDX and GDXJ) made lower lows in October, meeting our minimum targets, but the metals (gold, silver, platinum, etc.) did not – thus creating a divergence.

-SILVER- Silver rallied strongly on Thursday but needs to close above $26.00 to establish a breakout.

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-GDX- Miners made new lows in October and reached our minimum cycle target, whereas gold and silver didn’t. Prices need to close above the October $41.34 high to establish a bullish breakout.

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-GDXJ- Juniors tagged the corner of our target box and reversed higher. I think GDXJ could outperformance GDX in the coming months.

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Weekend Risks: With news of the elections and spiking COVID cases hanging in the balance, there is extreme risk this weekend. It is probably best to wait for confirmation from silver and miners (closing above their October highs), and to monitor developments over the weekend before committing to new positions. I will update members over the weekend concerning Friday’s close.

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, visit here.

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

 

Gold Forecast – Critical Post Election Price Levels

GOLD DAILY

By Wednesday or Thursday, gold will likely be breaking higher or starting the final plunge into its 6-month low. Our work supports a breakdown below $1850, but prices could forgo the terminal decline and break immediately higher if there is a concerning outcome.

Critical Gold Price Levels:

  • Closing below $1850 would confirm the final decline into a 6-month low.
  • Closing above $1940 would cancel the final decline and support an immediate bullish breakout.

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Our Gold Cycle Indicator (GCI) finished last week at 127. It needs to drop below 100 to recommend a cycle low. The last time it fell below 100 was in March.

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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, visit here.

 

Gold Miners Approaching Cycle Target

Prices are now collapsing into what should become the final cycle low. The terminal breakdown phase usually lasts about a week. We are very bullish on precious metals and miners long-term.

GDX DAILY

Gold miners are approaching our preferred cycle target. Prices could find a low within the next few trading days. I think we will see a tag of the lower trend channel or the 200-day MA. With gold trading at new all-time highs, the future for gold miners is bright. We expect much higher prices long-term.

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GDXJ DAILY

The junior mining ETF is also approaching our preferred cycle target. We think juniors will outperform their senior counterpart (GDX) moving forward as they are more leveraged to silver and higher gold.

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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, visit here.