Gold Price Prediction & Inflation Update

Below are the headline numbers from today’s report:

  • CPI (monthly) 0.5%
  • Annual CPI 7.0%
  • Core CPI (annual) 5.5%

In the snippet below, note the 49.6% year-over-year increases in Gasoline and 41% in Fuel oil. The 37.3% rise in used vehicle prices is also worth pondering.

Source: https://www.bls.gov/ces/

Is Oil the New Fed Funds Rate

The Fed can manipulate interest rates, but they can’t produce one drop of oil. To that point, energy and oil markets are beyond their control. Are spiking oil prices telling the Fed to raise rates? I think they are.

Households Getting Pinched

Energy makes up a large part of household budgets. With energy prices up 29.3% (year-over-year), that is a huge problem for anyone barely getting by. Add in the expiring child tax credit and it won’t be long before people start missing payments.

Expiring Tax Credit

Millions of American families received their final enhanced child tax credit on December 15, 2021. They will soon be looking for alternative ways to pay higher rent and energy bills. Some will dip into savings and retirement funds, while others will use credit cards or default. Either way, it will take more liquidity out of the system. Our work supports a 20% to 30% decline in the S&P 500 sometime for 2022.

Medium-Term Head Winds

  • Vital liquidity leaves the markets as the Fed completes tapering.
  • Interest rates rise as the Fed takes its thumb off the scale (ends tapering).
  • A potential energy crisis leads to a spike in crude oil above $100 per barrel.

Gold Price Update

GOLD 1-HOUR FUTURES CHART: Gold futures are rising after today’s inflation report. Near-term, resistance arrives between $1825 and $1835. A strong move above $1835 through $1840 would be near-term bullish. Whereas a bearish reversal would be considered on a daily close below $1815.

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I’m expecting gold to breakout above $2000 in 2022 and approach $2800 to $3000 by year-end.

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 regular updates, please visit here.

AMC Price Prediction – Dropping below $20.00 Could Trigger Waterfall Decline 

AMC PRICE CHART 

I assign the following odds to the next 3-months of price action in the AMC chart below:

*Bullish Breakout above $35.00 (30%)

*Neutral consolidation between $20.00 & $30.00 (30%)

*Bearish Breakdown below $20.00 (40%)

AMC chart

Note- If prices collapse below $20.00 in the coming days, downside follow-through below $15.00 will support the worst-case scenario and panic selloff to $10.00 or lower.

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 regular updates, please visit here.

 

Gold Price Prediction for 2022

  • After performing poorly in 2021, gold prices are historically undervalued and should do much better in 2022.
  • Gold could remain soft in the first quarter but starting in Q2, we see the potential for a strong breakout advance.
  • If gold adheres to our technical outlook, we think prices could reach $3000 by the end of next year.

Negative Real Rates

The post-pandemic price action in gold has been surprising. Historically, gold thrives during periods of high inflation and negative real interest rates. In the chart below, you’ll see that 5-year Treasuries have yielded -1.5% for much of 2021. With real yields profoundly negative, shouldn’t gold be soaring?

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Source: https://fred.stlouisfed.org/series/DFII5

What Caused Gold’s Underperformance?

I see two distinct factors contributing to gold’s underperformance over the last 12 to 16-months:

  1. From August 2018 to August 2020, gold rallied from a low of $1167 to a high of $2089. After a sharp 80% rise, an extended consolidation was expected. We saw something similar following gold’s breakout in 2004.
  2. A record number of government stimulus payments (stimmies) went out to unemployed Americans. While some of that money went to essentials, much of the excess was gambled on meme stocks and altcoins as out-of-work Millennials tried to get rich day trading. That kept gold out of favor.

Gold’s Technical Setup

As a technician, I’m always looking for historical price patterns to help forecast future moves. In gold, I see overwhelming similarities between now and the 18-month consolidation between 2004 and 2005. This pattern, if it holds, supports a convincing breakout in 2022 and a rally towards $3000 by year-end.

GOLD WEEKLY CHART

Gold is in a similar setup to 2005. The post-breakout consolidation that started in August 2020 is almost over. Expect renewed bullishness beginning in Q2 2022 that should last into year-end. Our most bullish case suggests gold could challenge the $3000 level.

Focus on the similarities between the 2020/2021 consolidation and the post-breakout consolidation of 2004/2005. I believe we are finalizing the ending triangle consolidation now, and a decisive breakout should follow in the second quarter of 2022, possibly as soon as February or March.

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In summary, we expect much better performance from gold in 2022, with the potential for a 60% advance from current levels. Gold miners could outperform to the upside and may double from current levels. Our Basic Metals Portfolio is overweight and will continue to add high-quality assets in 2022.

After rising to $3000 in 2022, we expect another consolidation, followed by new highs in 2023 and then a more profound decline in 2024.

Trade Gold with FXTM

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 regular updates, please visit here.

Tesla Price Collapse – Contrary Indicator Supports a 90% Decline

The same honor was bestowed upon Jeff Bezos in 1999, before an epic 94% decline in Amazon. Will a similar fate embrace Tesla? The parallels described in this article are too obvious to ignore.

Amazon 1999 & Tesla 2021 Parallels

AMAZON CHART 1997 to 2003: Amazon went public in May 1997. Prices exploded higher, rallying 5X over the next 10-months. In 1998, the bubble phase began – prices rallied 14X from the May $7.10 bottom into a double top. The final bubble top (4) arrived in December 1999, On December 27, 1999 (5) Bezos was named person of the year. Prices collapsed 94% from the peak and finally bottomed in 2001.

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TSLA NOW (2021): The similarities between Amazon’s 1997 to 1999 bubble and Tesla’s 2019 to 2021 run are too obvious to ignore. From the June 2019 low, Tesla rocketed 5X in just 7-months. After the March 2020 low, the bubble phase began with prices rising on average 14X.

The initial momentum peak (2) arrived about 416-trading days from the start, with the terminal peak (4) landing less than a year later. Elon Musk was just named person of the year (5) 633-Days from the start (Bezos was named at 653-Days).

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I have a maximum crash target between $55.00 and $85.00 by 2023. With a moderate downside price of $150 upon a confirmed breakdown below $500.

Progressive closes below $900 in Tesla would support our most bearish outlook.

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 regular updates, please visit here.

AMC Price Update – AMC Must Hold $20.00 to Prevent Panic Selloff

AMC DAILY CHART– Prices rallied from $1.92 to $72.62 in just 5-months. Most retail traders have a buy-in price above $15.00, and their profits are dwindling quickly. It’s easy to HODL when everyone sees green – it gets much harder when those numbers turn red (trust me).

 

In overview, as novice traders see their 2020 profits turn into losses, they may begin to panic. Prices dropping below $20.00 within the next 48-hours to 72-hours could initiate a cascading selloff. If prices don’t hold $15.00, they could reach $10.00 quickly.

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 regular updates, please visit here.

 

Gold Forecast – Gold Price Predicts $1740 Late November Target

Our inflation outlook supports an explosive rally starting in December with the possibility of a January breakout.

GOLD FUTURES DAILY: Biden kept Powell in charge of the Fed, and gold prices are correcting into a 4-month low (pink arrows). The shorter 36-day cycle (light blue) is also due around now. With gold prices already below $1800, it looks like prices may come down to test the lower triangle boundary near $1740. Given this scenario, I suspect gold will bottom between now and next Friday’s employment report.

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Note: We had a similar dual-cycle in late November last year. Provided accelerating inflation data, I suspect gold will break upward from the triangle pattern in late December or early January 2022.

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 regular updates, please visit here.

 

Meme Stock Candidate (HYMC)

Meme Stock Criteria

To find a high-quality meme candidate, you need the following ingredients, in my opinion.

1) A small tradeable float

2) A low market cap.

3) Ability to trade on Robinhood

4) A low share price.

5) An Underdog or Romantic Story

6) Social Media Frenzy

Below I discuss a silver stock that I believe meets two-thirds of the benchmarks mentioned above.

Meme Stock Candidate

In my opinion, Nevada silver miner Hycroft Mining (HYMC) is one potential meme worth investigating.

Hycroft Mining History

The previous mine operator was Allied Nevada, which went bankrupt in 2015. Hycroft restructured and reemerged in 2019; prices dropped precipitously. The company is laying off workers and shutting down some operations. In all likelihood, they may go bankrupt (again). Prices have collapsed from $16.00 in 2020 to nearly $1.00.

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The stock is an absolute disaster, but it holds 4 of the 6 meme ingredients (see below).

Meme Candidate Checklist

1) SMALL FLOAT: According to Yahoo, HYMC has total outstanding shares of 60 million. Of that 60-million, 85% is held by institutions. I believe those institutions are part of the Allied Nevada settlement and won’t be selling until they reach a profit (likely above $16.00). So, that leaves about 9-million shares available for trading, according to quick math.

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Note- I don’t believe the Short % of Float of 245% is accurate.

2) MARKET CAP: With a market cap of just $63 million, there is plenty of room for 10X returns.

3) ROBINHOOD: Hycroft Mining trades on Robinhood under the ticker HYMC.

4) LOW PRICE: Currently, HYMC is trading at just above $1.00.

5) UNDERDOG STORY? On the story side, HYMC reportedly has the largest silver deposit in America. Silver was in the spotlight briefly after GameStop. Silver is not only a monetary metal: it is critical to the new economy (from solar to E.Vs).

With yesterday’s news, HYMC appears to be nearing life support (like AMC and GME). Perhaps this story will evolve into an underdog narrative? Or maybe not.

In my personal portfolio, I bought HYMC at around $3.50 earlier this year. I bought a few warrants Wednesday, and I bought some HYMC stock for the Gold Predict Metals Portfolio Thursday. Premium Members were alerted first.

Click here to view my recent article, Gold Price Forecast – Major Breakout Alert

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 regular updates, please visit here.

Gold Price Forecast – Major Breakout Alert

  • Gold prices have languished after spiking to new all-time highs in 2020.
  • The Fed’s transitory inflation story is dead, as inflation spikes to 30-year highs.
  • Some estimate the Fed’s favorite measure of inflation (PCE) could double from 3.5% to around 7.0% in 2022.

Gold’s Bumpy Road

On the bright side, the prolonged correction allowed die-hards (like me) an opportunity to buy high-quality producers at rock-bottom valuations.

Inflation Narrative Changing

Inflation is spiking broadly and across most sectors. The Fed has moved away from its transitory narrative. At Gold Predict, we knew inflation was not transitory, but it seems much of the world bought into the story. Gold lagged but that may have just changed with the October CPI.

Consumer Price Index

  • All items rose 6.2% for the 12 months ending October.
  • The largest 12-month increase since November 1990.
  • All items less food and energy rose 4.6% over the last 12 months.
  • The largest 12-month increase since August 1991.

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Note- The above inflation numbers exceed 30-year highs.

Unyielding Inflation

The Fed is receiving a harvest of unyielding inflation for injecting too much capital into the system. Without another crisis, they will likely have to raise rates in 2022, likely crashing the stock market. Between now and then however, I think inflation-sensitive assets like precious metals could soar.

GOLD DAILY CHART

Gold is approaching a critical trendline. A strong breakout above $1875 would support a run to new highs by early 2022. If this is the beginning of a powerful rally, then gold should slice through $1920 in November. The gold spring is coiled, and it could let loose.

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PLATINUM DAILY CHART

Platinum is a tiny market – if money begins to enter this sector, I think prices could move quickly higher. A breakout above $1150 would be incredibly bullish.

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Final Thoughts

If “Hot Money” moves out of meme stocks and starts chasing precious metals, we could see a blow-off spike higher into the first half of 2022. Precious metals are a coiled spring about to release, in my opinion.

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 regular updates, please visit here.

Gold Forecast – Gold Price Breakout Over Higher Inflation

Money flows may be turning to precious metals to hedge. Gold could reach new highs in the coming weeks, in my opinion.

Last Thursday, I tweeted the following:

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Follow Up: Gold finished Friday above the October high and confirmed my outlook. Today’s breakout above $1840 (bottom chart) supports a strong run for precious metals. Throw in some easy money liquidity, and we could see fireworks over the coming weeks.

GOLD DAILY (yesterday):

Gold prices are approaching critical resistance around $1840. An upside breakout in the coming days would be bullish, in my opinion. Failing to break out above $1840 will keep prices stuck in consolidation.

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GOLD DAILY FUTURES (now):

Gold is breaking above $1840 with ease as consumer prices increased 0.9% versus the expected 0.6%. This may be the beginning of a strong run if gold prices play catch-up to true (non-transitory) inflation.

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Final Thoughts: That rip-your-face-off rally mentioned in last week tweet may be starting.

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 regular updates, please visit here, or follow AG on Twitter at https://twitter.com/ag_thorson

Tesla Price Prediction: A Blow-off Top Followed by Epic Collapse

  • Hertz Announced an initial order of 100,000 Tesla’s to be filled by year-end 2022.
  • Tesla skyrocketed from a $913-billion market cap (October 22, 2021) to $1.21 trillion.
  • The bullish response added $300 billion, implying a $3-million price tag per vehicle ordered (not sold).

Tesla Daily Chart

Tesla shares skyrocketed above $1000 on the Hertz announcement. Tesla is now worth more than all the auto manufacturers combined. More on that later.

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Tesla Market Cap

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https://ycharts.com/companies/TSLA/market_cap

Gross Profit

Let’s say Tesla makes a generous $20,000 profit per vehicle ($20,000 X 100,000). That indicates a gross profit of $2 billion, far shy of the $300-billion increase. What is going on here?

Ford Motor Company

By comparison, Ford Motor Company currently sports a $72-billion market cap, so Tesla adding $300 billion in market cap is like adding four (4) Ford Motor Companies.

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https://ycharts.com/companies/F/market_cap

Major Auto Companies by Market Cap

Below is a quick rundown of all major auto manufacturers by current market cap. Tesla is worth more than all and sells less than 1% of the vehicles.

With a market cap of $1.21 trillion, TSLA is trading at a 25% premium above all auto manufacturers on the planet!

Tesla looks, acts, and smells like a bubble. The question is…when will it pop?

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 regular updates, please visit here, or follow AG on Twitter at https://twitter.com/ag_thorson

Gold Price Forecast – Are Gold Miners Signaling a Breakout in Precious Metals

A sustained breakout in gold miners could signal a major bottom in precious metals, in our opinion.

-GDX DAILY CHART- Technically, miners are back above the critical breakdown level of $31.00, supporting the potential for a bullish undercut low or bear trap. A sustained breakout back above the 200-day MA could signal the beginning of the next leg higher.

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GDX LONG TERM: The weekly chart of GDX illustrates the significance of the $31.00 price level. It took GDX seven years (2013 to 2020) to breakout above $31.00. After the post-Covid spike, prices extended too far too fast and have been correcting. Recently, GDX broke below $31.00, but that breakdown was fleeting (possibly a bear trap). Prices have since recaptured the $31.00 support level, and I see the potential for a significant bottom if prices maintain $31.00.

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-BARRICK GOLD- One factor supporting the potential for a significant bottom is the 3-year cycle in Barrick. It seems every third September (2012, 2015, 2018, 2021?), Barrick reverses the recent price trend. In this case, prices may have formed a significant bottom in September 2021.

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GOLD FUTURES DAILY: The intermediate gold cycle bottomed in early August. A breakout above the 12-month downtrend line could signal the next leg higher in precious metals. Until gold futures clear $1900 to $1925, precious metals remain vulnerable to more sideways consolidation.

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Our long-term stance remains firmly bullish on the yellow metal and believes gold will reach $7,500 to $10,000 in USD terms by the end of 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 regular updates, please visit here.

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

Gold Forecast – October Support Levels and Breakpoints

GOLD FUTURES 4-HOUR CHART: Gold futures are consolidating in a potential bull flag on the 4-hour chart. Upside follow-through above the 1-month trendline (currently $1770) would support a short-term bullish breakout. Progressive closes above $1840 would signal a meaningful bottom. On the bearish side, continued weakness below $1720 would promote a retest of the $1675 area and increase the odds for a temporary breakdown to $1550.

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Update on Fed Policy: If the Fed tapers in 2022, that lack of demand (buying of Bonds and Treasuries) will cause interest rates to rise. Higher interest rates rise, combined with slowing growth and persistent inflation, will choke the economy causing stagflation. The Fed will have no choice but to keep buying bonds in 2022 to suppress interest rates.

When the above outcome becomes clear, the bond market will tank (everything the Fed is not buying), and precious metals (hard assets) will soar. It’s just a matter of time, in my opinion. Consequently, I view the current pullback in precious metals as a long-term buying opportunity – not a time to panic sell.

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 regular updates, please visit here.

 

Silver Price Update – Silver Prices Collapsing Below Support as Economy Weakens

SILVER PRICES 4-HOUR CHART

Spot silver (currently $21.78) is below $22.00 and a breakdown towards $19.00 is becoming likely. Prices would have to reverse soon and finish the week above $22.00 to prevent a deeper pullback.

Today’s weakens is attributed to trouble with China, a slowing economy, and a stalemate in Congress. Most of these factors should prove bullish for gold, and eventually silver, as they develop.

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Note- A collapse in the “paper-price” of silver would increase demand and support a bottom straightaway. So, if prices do break below $20.00, I don’t see it lasting long, but rather view it as an opportunity to buy physical metals. At today’s prices, I prefer platinum and silver coins over gold.

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 regular updates, please visit here.

Bitcoin Price Update – Could China’s Crypto Crackdown Trigger a Flash Crash?

  • China’s central bank announced all transactions of crypto-currencies illegal, effectively banning digital tokens such as Bitcoin.
  • “Virtual currency-related business activities are illegal financial activities,” the People’s Bank of China said, warning it “seriously endangers the safety of people’s assets.”
  • With the heightened default risk surrounding Evergrade, I see the potential for a widespread contagion and rapid deleveraging that could trigger a flash crash in crypto.

BITCOIN FUTURES DAILY: Bitcoin is down on today’s news. Breaking below $40,000 would imply a secondary top at $53,125 and promote more sideways consolidation. Ultimately, a breakdown below $28,000 is needed to confirm a crypto bear market. Until then, prices are merely consolidating.

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Note: To signal a flash crash, bitcoin would have to drop below $28,000. 

Deleveraging: The Chinese economy is highly leveraged. Many of its citizens have their wealth wrapped up in real estate. The situation with Evergrande is horrible and could lead to massive losses. If a deleveraging begins, the government may have to step in to cover losses and maintain order. If they fail to respond appropriately, we could see a sharp selloff in most assets, especially in overleveraged crypto.  

Potential Flash Crash: One scenario I’m considering is a potential liquidity shock and flash crash in crypto exchanges. Let me explain; if we see a panic deleveraging (now or later), liquidity could dry up along with buy orders. If buy orders dry up while investors are still rushing to the exits – crypto prices could plummet, temporarily. How low could they go? I have no idea, but theoretically, some could drop to the lowest buy order on the books. A flash crash would likely last just a few seconds before exchanges shutter.

The flash crash described above is unlikely but certainly possible given today’s fast-moving markets. If a flash crash occurs, it’s most likely to happen over the weekend (when traditional banks and funding sources are closed). Think about it: low weekend trading volume combined with a deleveraging event could trigger margin calls at a time when traders that are leveraged to the max can’t assess additional funds. That could result in forced selling.

Final thoughts, if crypto transactions are illegal in China, and there is a rush to liquidity – investors may switch back to gold to protect purchasing power. If that occurs, precious metals could see a nice boost.

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 regular updates, please visit here.

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

Gold Forecast – Gold Signals Potential Bottom Over Dismal August Jobs Report

The August employment report came in at just 235,000 jobs versus the expected 730,000 by economists. Gold jumped over the potential for a weakening economy and delayed Fed tapering. A sustained breakout above $1840 in September would be considered bullish.

GOLD FORECAST

GOLD LONG-TERM (MONTHLY): If we are in a similar circumstance to 2004, then a breakout above $2000 in 2022 would support a long-term target between $7500 or $9500 by 2028 to 2032.

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GOLD 4-HOUR CHART: Gold (currently $1824.50) jumped after the dismal employment report showing just 235,000 jobs created in August. To support a bullish breakout, prices would have to clear the $1840 area followed by the downtrend line currently near $1880. Dropping back below $1800 in September would promote more consolidation.

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GOLD MINERS (GDX) UPDATE

GDX DAILY (15-MONTH) CHART: If GDX stays above $33.00 in September, I see the potential for a Double Bottom (March/August 2021). An advance above $40.00 would confirm a bullish breakout and support new highs in 2022.

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GDX DAILY CLOSE-UP: Ending the week above $33.00 would be bullish. However, stiff resistance lies just ahead at $34.25 and then again near $37.00. Sustained upside may prove difficult without a significant increase in investment demand. I think as confidence wanes, gold should begin to respond positively.

On the Downside: Closing below today’s $32.50 gap anytime next week would be bearish and could trigger additional downside.

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COVID UPDATE

Our work continues to support an increase in Covid related infections (Delta Variant) into year-end 2021. If the 2020 pattern repeats – Covid should reemerge in the Mid-West (US) starting in September or October.

ISRAEL COVID DATA

Israel has over 60% of its population fully vaccinated, and daily cases are surging. The Delta variant is highly transmissible, and there have been multiple breakthrough cases. The death rate has remained low, but this is still very concerning.

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US DAILY CASES

Daily cases in the US are slowly rolling over just below the 200,000 level. It’s important to note that these cases are primarily in the southern states, including Florida and Texas. The trend is setting up for record cases into year-end that could reach over 400,000 per day, in my opinion.

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SUPPLY DISRUPTION or QUIET PANIC

Maybe it’s the slowly recovering supply chain, but I’m starting to see shortages (some limits) on basic supplies and bottled water in my area. Also, more people are choosing to wear masks in public. It could be nothing, but on the surface, it feels like the beginning of supply hoarding or perhaps a quiet-panic brewing beneath the surface.

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 regular updates, please visit here.

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

GOLD FORECAST – Gold Prices Must Hold $1675 to Prevent a Breakdown

The intermediate cycle in gold (chart below) has formed turning points roughly every 128-calendar days (4.2-months). That cycle just turned again, triggering an intermediate low on August 9, 2021. Gold must now stay above that low to prevent a breakdown to the $1500 to $1550 area.

I’m long-term bullish on gold and believe the current correction is just a pause in a new bull market that should last into 2030.

KEY PRICE LEVELS

  • A sustained breakdown (more than a week) below $1670 would invite a retest of long-term support between $1500 and $1550.
  • Whereas a breakout above $1850 is needed to support the next leg higher in precious metals.

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The next cycle turning point (high or low) should arrive by mid-December 2021.

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 regular updates, please visit here.

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

Gold Forecast – Gold Finishes Strong After Collapsing Below $1700

Before we jump into the weekend, I wanted to mention the weekly chart of gold.

GOLD WEEKLY: A close above $1760 on Friday would create a bullish hammer and a potential Double Bottom. Upside follow-through above $1800 next week would promote an intermediate low with a breakout above $1920 required to confirm the next bull market advance.

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Note- A sustained breakdown below this week’s low ($1675) would support more weakness in precious metals and a possible dip to $1550 or lower in gold.

Our Gold Cycle Indicator hit ZERO on Tuesday, triggering a Portfolio Buy Signal. Currently, the GCI is sitting at 18.

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Covid Update

Our analysis supports a rigorous battle with Covid returning this Fall with a potential surge into precious metals as a store of safety. Watch for spiking demand in physical investment bars and coins as an early warning.

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 regular updates, please visit here.

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

Gold Forecast – Must Hold Bullish & Bearish Price Levels for Gold and Miners

Red Flag or Shakeout?

Some gold miners recently dipped below their June lows. Was that a red flag or a manufactured shakeout? Below are key levels I will be watching. If it was just a shakeout, then miners may be on the verge of a significant rally.

GDX DAILY: Thursday’s sharp down day in miners was either a red flag or a shakeout. A shakeout occurs as prices form a new uptrend – when bulls remain skittish. It forces weak longs to sell (puke-up) their positions just before the next rally. A close above $35.00 next week would support the shakeout theory. However, a close above $36.75 is needed to suggest a more meaningful advance.

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To support a more bearish outcome, GDX needs to close progressively below $33.00 and then below $30.00.

Note- Our metals portfolios recently bought gold miners and will continue to accumulate precious metal assets moving forward.

Gold Price Scenarios and Projections

GOLD MONTHLY VALUE: With the fundamental backdrop of endless budget deficits and record-setting monetary policy. I believe there is a 70% bullish case for gold (scenarios A & B) to continue higher into 2023 and 2024. I see a 20% neutral (scenario C), suggesting gold stays below $2000 a bit longer. Lastly, I see a 10% bearish outlook (scenario D) that could allow gold to dip back to $1175.

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Probabilities Below:

A) Gold bottomed in March 2021 at $1673.30. The renewed uptrend supports a $3000 price target by Q2 2023. I assign a 40% probability.

B) The correction in gold extends back to the $1575 level a forms a lasting bottom. Closing above $2000 would report a $3000 target by Q2 2024. I assign a 30% probability.

C) A monthly close below $1575 would recommend a deeper correction to the bull market breakout area surrounding $1375. In this scenario, I’d expect a retest of $2000 by 2024. I assign a 20% probability.

D) Gold fails to hold $1375, and prices fall all the way back to $1175 by Q4 2024. I assign a 10% probability.

In closing, with the price of just about every commodity on the planet near new highs and trending higher, I believe it is just a matter of time before precious metals resume their bull market trends.

The only way I see gold dropping back to $1000 or lower (as some are expecting) would require a massive deflationary shock. If that occurs, then everything will collapse in value, including an 80% decline in global stock markets. Either way, it may be wise to have some physical gold for deflation and some investment gold and miners for an inflationary shock wave.

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 regular updates, please visit here.

 

Gold Forecast – Investors Should Take Note of Gold’s Head & Shoulder Bottom

HEAD & SHOULDER BOTTOM

The 40-day cycle in gold bottomed last week as forecasted. The formation of the right shoulder appears complete. The multi-month bottoming pattern continues to make progress, with a breakout above the neckline ($1920) projected for August. The price objective upon a confirmed breakout is $2100 – $2200.

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Our Gold Cycle Indicator (GCI) dipped below zero and triggered a buy alert last Tuesday. Our Premium Metals Portfolio entered new positions in gold and silver miners at that time. The GCI is back above zero (currently 34).

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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 regular updates, please visit here.

Gold Forecast – Cycles Support a Bottom This Week

GOLD 4-HOUR CHART

Over the last several months, I’ve noted how gold tends to form medium-term highs/lows as we enter a new month. If that trend continues then gold should bottom within the next few days.

Cycle Note: The previous 40-day cycle bottomed on day 37 (three days early), so it’s possible this cycle (currently day 41) extends a few days to balance the series. Overall, I think the odds support a bottom in gold very soon.

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GOLD DAILY CHART

The Gold Cycle has been forming interim cycle high/lows approximately every 40-trading days. More recently, those turning points tend to arrive as we enter a new month. When you put it all together, technically speaking, I think we are very close to a low. The question is, where will prices go from there?

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To maintain a bullish footing, I need to see gold breakout above the June 1, 2021 high ($1919.20). Anything that falls short of that would promote more consolidation or an even deeper pullback.

Note: The oversold MFI (top indicator) also supports a near-term bottom.

SILVER CHART

Silver has been working on an ascending triangle consolidation for nearly a year. If prices maintain the lower boundary near $25.00, a breakout above $30.00 is favored. I like to think of these patens as coiled springs. When the energy is released – it can be explosive.

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In closing, I’ll remind everyone that gold is a form of financial insurance. The time to buy insurance is when it is cheap and when no one wants it. Once the disaster arrives – it is too late.

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 regular updates, please visit here.