Gold Price Forecast – The Next Buying Opportunity

Overall, this is just a normal cycle correction in a new bull market – prices should bottom in November or December.

If you study the markets long enough, you’ll begin to recognize a cyclical nature to virtually everything. Financial assets rise and fall with the business cycle. Agricultural commodities are subject to weather patterns and drought. In gold, you’ll notice prices seem to base about every 6-months.

THE GOLD CYCLE

Below is a weekly chart of gold from 2007 to 2012. The blue arrows represent each 6-month bottom. Not every cycle is equal, but there is a definite cadence to the lows. In bull markets, prices make higher lows.

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The correction into each 6-month low is usually filled with a few twists and turns. Typically, you can divide the entire correction process into four stages.

  • Stage 1 (The Cycle Top): Gold has rallied at this point for several weeks; bullish sentiment is high. However, a more in-depth look reveals weakening underlying momentum portrayed by negative divergences in the MACD and RSI. Eventually, prices peak, and we mark the cycle high.
  • Stage 2 (The Topping Process): The uptrend is showing signs of weakness, but it’s unclear if prices topped. Sentiment remains firmly bullish with most traders still positioning for new highs – many overleveraged. However, the market is running out of buyers – rallies decay and prices fail to maintain new highs.
  • Stage 3 (A Top Acknowledged): After a couple of failed rallies, bullish sentiment begins to wane. The bears, once timid, start to grow in confidence. It’s at this point we can see a sharp down day as overleveraged traders acknowledge a trend reversal (sometimes all at once) and race to the exits. The bulls stop looking for new highs and begin looking lower.
  • Stage 4 (The 6-Month Low): Prices have declined long enough and deep enough to drive sentiment from bullish back to bearish. Everyone that was expecting new highs at the top is now calling for new lows – some are even shorting the market. Our Gold Cycle Indicator is below 100 and in bottoming territory. Ideally, we’ve seen at least a 50% reduction in commercial net-shorts from the peak.

THE CURRENT CYCLE

I believe we will transition into stage three (described above) once gold breaks the October $1465 low. Commercial net-shorts remain elevated at -310,492. Our Gold Cycle Indicator (currently 237) should dip below 100 when conditions are consistent with minimum cycle bottoming.

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After this cycle bottoms, a new sequence begins – rinse and repeat. Some corrections are more profound than others, while some are unusually shallow. The market throws a curveball occasionally, to keep traders on their toes. We have a minimum target of $1410 – $1420 and see the potential for a backtest of the June $1380 breakout area.

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 – Cycles Pointing Lower

We use cycles to time key turning points in precious metals. The XAU mining index has carried a somewhat consistent 42 to 46-day lineup. The current setup is beginning to favor a bottom in early December.

XAU CYCLE

Prices formed an interim cycle low on the first day of October (day 42). This cycle should fail (left translate) and eventually break the 87.48 pivot. If established, that would support a 6-month low (green boxes) in early December. The severity of the subsequent correction depends on how quickly prices break below the October 87.48 low.

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GOLD CHART

If miners formed interim cycle lows on October 1st, then it stands to reason gold and silver did too. If correct, that implies we are 7-days into a new series that should left translate and then break the October $1465 low. Typically, left translated cycles peak with 12-trading days, so ideally, this rally should fade between now and next Thursday.

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In summary, expect more wild swings as gold works its way down into the next 6-month low. A successful trade deal with China could send prices reeling. The COT remains near-term bearish, and our cycle indicator (currently 287) is far from supporting a bottom. Investors should consider being patient and waiting for better opportunities later this year.

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/

Platinum Price Forecast – The Forgotten Metal

Nowadays, finding a bullish outlook for platinum is as rare as discovering the metal itself. I think this is about to change as prices recently validated a bullish breakout.

10-YEAR CHART- Platinum bottomed at $755 in 2018 and launched into a series of higher lows and higher highs (the definition of an uptrend). That progression conquered the multi-year trendline and validated a bullish trend change. Sentiment remains depressed – it seems we have a new bull market, but nobody cares. Note the record breakout volume in September (bottom).

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DAILY CANDLE CHART- After peaking at $1000, platinum is correcting into an intermediate cycle low. Prices are currently backtesting the multi-year trendline. Holding this area would be incredibly bullish, near term. Worst case scenario, if prices slip back below the 200-day MA, I see strong buying coming in near $800. Either way, the technicals, and recent breakout support a bottom and higher prices.

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With a renewed bull market in precious metals, it’s just a matter of time before platinum begins to play catch up to gold. During the 2000s, platinum was twice the price of gold on several different occasions. I don’t know if prices will double gold again, but a return back to parity seems promising. Long-term investors may want to consider a ratio play outlined in my article titled – A Simple Strategy to Buy Gold for Less Than $1000.

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 – Bouncing, Not a Bottom.

The breakdown of the head and shoulder pattern was interrupted Tuesday when ISM manufacturing struck a 10-year low. Gold reversed immediately and the stock market plunged. Futures are back above $1500, but the technicals and Commitment of Traders (COT) suggest the yellow metal is yet to make an intermediate low.

GOLD COT UPDATE: Typically, we see at least a 50% reduction in commercial shorts from the cycle peak to the 6-month low. Throughout the prior 10-week correction (February to May), shorts dropped from -166,477 to -57,396. Before I expect the next 6-month low, I’d like to see commercial net shorts near -170,000 or lower (currently -303,688).

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Expect increased volatility in the coming weeks and kneejerk reactions surrounding escalating impeachment and trade talks. With commercial shorts above 300k and our Gold Cycle Indicator (GCI) at 284, it could be another month or two before metals and miners secure the next 6-month low.

Overall, I’m convinced gold is in a new bull market, and it’s an excellent time to be a precious metals investor.

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 – Head & Shoulder Top Confirmed

The post-Fed bounce terminated last Tuesday at $1543.30. A head and shoulder topping pattern emerged, and a breakdown below the pattern neckline at $1490 would establish a minimum price objective of $1410. 

Gold Daily

COT UPDATE: Commercial hedgers added 26,746 shorts last week bringing their total net short position to a record setting -345,145 contracts. Generally, I like to see shorts cut in half before I start looking for the next 6-month low. To shave off 172,000 contracts will take several weeks, and we may get a false bottom or two as gold works down these positions. 

BACKTEST POSSIBLE: The June breakout in gold above $1400 confirmed a new bull market. However, the record number of outstanding shorts is concerning and could trigger a backtest of the $1360 – $1380 breakout level in Q4 of 2019. If established, that may become one of the last great buying opportunities

Gold Weekly

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 – Caution is Warranted

QUICK COT UPDATE: Commercials hedgers added 12,728 shorts last week for a total net-short position of -318,339 contracts. Down from the September high (-337,741) but still very elevated. That, combined with an aging cycle, suggests gold is facing a significant headwind as we head into October.

We find cycles help identify significant turning points in precious metals. The XAU mining index (chart below) has been running a 42/46 day alternating cycle. The previous cycle bottomed 36-trading days ago. A 1-2 week bounce from here would support a secondary peak during the first week of October followed by an intermediate decline into late November or early December.

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Gold may be setting up a bull trap for investors as prices test or marginally break the $1566.20 high in the coming days. Our median-term forecast calls for an eventual breakdown below $1490 and a potential backtest of the breakout area surrounding $1380.

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Longer-term we believe gold recently confirmed a new bull market and the next intermediate low may become one of the last great buying opportunities.

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 – Post Fed Selloff Tests $1490

Correction Scenario 1

Gold builds a base above $1490 and tests or marginally breaks the September $1566.20 high. Prices consolidate throughout much of October before finally collapsing below $1490 and into the next cycle low.

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Correction Scenario 2

This scenario calls for a deeper correction and perhaps a backtest of the $1360 – $1380 breakout area. It requires a breakdown below $1490 in September. The initial decline would likely reach $1420 – $1440, followed by a consolidation and then a drop into a final low.

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To favor one scenario over another, we need a $20.00 swing in either direction. Above $1530 supports the former – below $1490 establishes the latter.

Either outcome should lead to an attractive buying opportunity later this year. Our Gold Cycle Indicator (currently 285) should dip below 100 before prices reach a sustainable low.

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 $1490 Level Is Critical

Intermediate corrections are natural. In gold, prices tend to bottom about every 6-months (give or take a month). The last low came in May. If the current cycle remains on course, the next significant bottom should arrive in late October or early November.

Gold surged as US interest rates plunged over the summer. The 10-year Treasury yield collapsed from 2.57% to 1.43% while gold rocketed from $1267 to $1566 in 4-months. With Treasury yields stabilizing, gold is finally taking a breather.

In August, Fed fund futures were pricing in a September rate cut at 100%. Those odds have slipped to 63.5% before tomorrow’s announcement. A pause on interest rate cuts could send gold below the critical $1490 level.

Longer-term we are very bullish on gold. Prices broke out in June and confirmed a new bull market. On a near-term basis, we are expecting a multi-week correction and perhaps the last great buying opportunity as gold declines into the next 6-month low.

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After peaking at 440 in August, our Gold Cycle Indicator (GCI) dipped back into neutral territory (currently 334). We won’t expect a sustainable bottom in gold until the GCI slips below 100 in October or November.

Take a look at the best Gold trading brokers for 2019


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 Last Great Buying Opportunity

One of the best times to buy any asset is just after a multi-year breakout. In my article Price Forecast for The Next Decade, I explained how precious metals were positioned to be the best performing asset class during the 2020s. That transformation remains on course as Governments transcend the limits of quantitative easing.

Negative interest rates are turning financial models on their head. In Denmark, homeowners can get a 10-year loan at -0.5% interest. Yes, the bank is paying them to borrow. This trend is unsustainable. The next step is debt monetization and currency depreciation, and that is the ideal environment for gold.

MULTI-YEAR BREAKOUT: The initial breakout rally reached our primary resistance level. Next, we should get a multi-week cycle decline back towards the $1380 breakout zone. We may be approaching the last great buying opportunity.

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

Platinum Forecast – Prices Breaking Out

In my article A Simple Strategy to Buy Gold for Less Than $1000I explained the misspricing between gold and platinum and why I felt it wouldn’t last. Platinum completed its bullish trend reversal last week and presumably started a new bull market. With history as our guide, I foresee platinum reaching parity and then surpassing the price of gold.

Historically Cheap

The platinum to gold ratio slipped to its lowest level on record reaching 0.556 in August 2019. At nearly half the price of gold – platinum was/is severely undervalued. For reference, platinum has traded at a premium to gold about 85% of the time over the last 40-years. In fact, in 2000, 2004 and 2008 platinum was more than double the price of gold.

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The weekly platinum chart broke sharply above the 3-year trendline and settled above the 200-week MA (first time since 2012). That combined with record volume supports a significant breakout. Near-term, prices are coming into resistance near $1000.

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Things are finally turning around for platinum. Long-term investors may want to consider buying dips into intermediate cycle lows.

Gold Price Forecast – Prices Grapple With $1550

Gold is testing the 2013 bear market inflection point at $1550. The trend appears to be slowing after rallying $300 since May. Silver has taken the torch and is leading gold higher; that often occurs towards the end of an intermediate cycle advance.

Gold is testing the 2013 bear market inflection point at $1550. The trend appears to be slowing after rallying $300 since May. Silver has taken the torch and is leading gold higher; that often occurs towards the end of an intermediate cycle advance.

Near-term, gold futures would have to close below $1535 to flag a potential top. A subsequent breakdown below $1500 would validate a cyclical high and the beginning of a multi-week correction.

Technical Picture

GOLD DAILY CHART- Prices formed a clear reversal candle on Monday after spiking to $1565. Futures held support at $1535, and there was no bearish follow-through. To support a terminal spike high, gold needs to close below $1535 then break support at $1500.

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SILVER DAILY CHART- After a mid-August consolidation, silver broke sharply higher above $18.00. Prices are now leading gold. The next level of resistance arrives between $18.30 – $18.65. As long as gold remains below Monday’s $1565 high, the move in silver is vulnerable.

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SLV:GLD RATIO- As prices approach cyclical turning points, I often refer back to the ratio charts for clues. The recent rally in silver propelled the ratio back to the bearish trendline. It’s make or break time for silver. A failure here would support a multi-week pullback in precious metals.

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The trends in precious metals are undoubtedly stretched, and a correction is justified. A daily close in gold futures below $1535 would support a potential top. Intermediate traders should consider taking profits on longs — no sense in being greedy.

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

Gold Price Forecast – A Correction is Supported

Friday’s COT report revealed commercial traders increased their net short position to near-record levels at -336,250 contracts; a firm warning this late a cycle. That, combined with technically overbought conditions, submits gold is approaching a level compatible with previous tops.

As a technician, I like to scan the charts for relevant correlations. Looking at the 2002 breakout in gold, I found compelling similarities between then and now. With this as a guide, I see the potential for a spike high and bearish reversal.

THE 2002 BREAKOUT: After building multi-year base prices broke out above $330 in 2002 and confirmed a new bull market. The initial rally surged and temporarily spiked above the bear market inflection point ($380) before entering a multi-week correction.

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THE 2019 BREAKOUT: Like 1996 through 2002, we have a multi-year base followed by a bull market breakout. The initial surge is underway and approaching the 2013 bear market inflection point at $1550. We could see a quick spike above $1550 before entering a multi-week correction.

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In summary, gold is in a new bull market, and prices are testing the bear market inflection point near $1550.

The commercial traders (smart money) are well-positioned for a correction. The technicals are overbought, and a multi-week pullback is justified. A volatile spike above $1550 that reverses swiftly could mark a top.

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.

Silver Price Forecast

A few days ago, I laid out the bullish case for gold and why I believe it will be one of the best performing assets over the next decade. I see even more potential in the silver chart (see below).

  1. Prices hold support above $16.20 and breakout above $18.50 later this year.
  2. Prices fail to hold $16.20, consolidate a bit longer and breakout next year.

Either way, the multi-year base at $14.00 represents a long-term bottom that should hold. With gold breaking above $1400, it’s likely just a matter of time before silver begins to play catch up. When prices break higher, I expect an initial run to $26.00. Longer-term, we see silver exceeding the $50 all-time high and entering a parabolic advance above $100.

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

Gold Price Forecast for The Next Decade

It seems each decade has an investment theme that favors one asset class over another. What performed well over the last decade generally underperforms during the next.

  • During the 1990s, the stock market was the place to be. An explosion in Internet stocks led to the dot.com bubble. The Nasdaq rallied from 330 in 1990 to 5100 by 2000.
  • During the 2000s, precious metals and commodities were the best performing assets. Gold rallied from a low of $255 in 2001 to $1923 by 2011.
  • During the 2010s, money flows switched back to the stock market. The DOW bottomed at 6469 in 2009 and prices reached 27,400 in July 2019.

Of course, it’s impossible to get in at the bottom and out at the top in real-time. The transition period from one assets class to another usually takes a couple of years – the key is recognizing it.

After a 10-year bull market in stocks, it stands to reason another asset shift is unfolding. That combined with the recent breakout in gold leads me to believe the next decade will favor precious metals and commodities (tangible assets).

Technical Outlook and Price Objectives

Monthly Gold Chart

Gold broke out of the 6-year basing formation in June when prices closed above $1400. The overall structure is similar to the 1997 – 2003 rounded bottom that generated an 8-year bull run. From here, I suspect gold will work its way higher to finish the larger degree 10-year pattern and breakout to new all-time highs in the next decade.

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Quarterly Gold Chart

One of the easiest ways to achieve potential price targets is with a simple ABC measured move. The initial advance (A) is followed by a lengthy correction into (B); the halfway point. By adding A to B, we come up with C (the price target). In this case, an A=C target suggests roughly $8000.

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An $8000 price target for gold almost sounds ludicrous, I know. But what could cause prices to reach such lofty levels?

  • A collapse in confidence- A total collapse in confidence in Governments and their ability to manage.
  • Widespread fear- Governments may resort to debt monetization and currency depreciation to inflate away debt.
  • Speculation- A surging uptrend and new all-time highs in precious metals leads to the fear of missing out and sparks a speculative bubble.

Will gold reach $8000 during the next decade? Frankly, I have no idea. However, I do see the potential for the above ingredients. Whatever the case, I think a new gold bull market is just getting started, and investors should consider some allocation.

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 – Time for A Correction?

Silver reached $17.49 before collapsing to $16.51 intraday. The short-term breakout above last week’s high ($17.26) was short-lived, and an interim top is supported.

GDX DAILY CHART

Miners closed lower on Monday as gold rallied above last week’s $1522 high. That non-confirmation delivered a timely warning. The MACD has diverged negatively supporting an aging trend. A cycle high is plausible; closing below $28.00 would establish a top.

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Gold had a nice run off the May low, but prices were unlikely to make it through resistance surround $1525 – $1550 on the first try. A multi-week correction should offer favorable buying opportunities.

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 – Heavy Resistance Surrounding $1525

The 10-year treasury yield crashed to 1.59% on Wednesday, and an interim low is likely (see chart below).

TREASURY YIELDS CAPITULATE

The move below 1.95% in 10-year treasury yields triggered multiple capitulation signals. The selloff reached a panic extreme on Wednesday, and a bounce towards 2% is supported.

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GOLD DAILY CHART

Gold futures reached a high of $1522.70 Wednesday in blowoff type fashion. Prices are challenging long-term resistance between $1525 and $1550. The MACD is diverging negatively, advising decaying momentum. The technicals maintain a topping process in gold, which should result in a multi-week correction.

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GDX DAILY CHART

The gold mining ETF gapped higher on Wednesday but finished below its opening tick, forming a black candle (usually bearish). A daily close below $28.67 in the coming days would register an exhausting gap and establish a reversal. Prices would have to close above $30.00 to trigger further upside.

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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 – A Test of $1525 Likely Before a Correction

The June breakout above $1370 signaled a new bull market in gold. The initial surge took gold to $1442.90 before prices entered a running consolidation. Monday’s close above $1470 registered a short-term breakout, and this wave higher should test $1500 – $1525. From there, I suspect we will see a more profound multi-week correction.

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The monthly chart shows stiff resistance surrounding the 2013 break down near $1525. That area (give or take $25.00) should keep a lid on this advance and trigger the next correction. A correction from $1525 could be sharp, the commercials have built a rather large short position. Any pullback would be a buying opportunity, in our opinion, as we believe the bull market is just getting started. Note, the record volume confirming June’s breakout.

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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 – Post Fed Bounce

Gold slipped to $1412.10 by this morning and prices are bouncing. The rebound is testing the lower extreme near $1428.50. It would take a sustained move above the upper Fed level ($1444.40) to reverse yesterday’s selloff and support a run to $1500 – $1525.

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Silver slipped to $15.94 before bouncing. Prices would have to rally above $16.30 and then $16.50 to reverse the Fed-day selloff. If accomplished, I’d expect $17.00 – $17.35.

Gold miners (GDX) are above the lower Fed-day threshold ($26.96) and require a decisive rally above $27.72 to secure a reversal.

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From a cyclical perspective, metals and miners a due for a pullback. The question is – will the pullback be quick and shallow or something more profound lasting a few weeks and cutting deeper. I suspect Friday’s employment report will shed some light…the close is key.

If gold, silver, and miners exceed their upper Fed-day thresholds (described above), then the cyclical pullback could very well be over.


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/

A Simple Strategy to Buy Gold for Less Than $1000

What I’m about to describe is a simple ratio play that takes advantage of temporary imbalances in the metal’s markets.

The plan is straightforward: Buy physical platinum at these levels and wait for prices to return to parity with gold. When prices reach parity, sell or trade the platinum in for gold.

Drawbacks to this strategy: It’s a long-term strategy and may take a few years to realize. What if platinum never returns to parity with gold? I suppose that’s possible but unlikely given the historical variations in these markets.

The four primary metals for investment are gold, silver, platinum, and palladium. Each is rare and has its advantages. At times, market forces will favor one metal over the others, and prices will reach extremes. Take palladium for example, during the 2008 financial crisis prices slipped to $160 when gold was at $680. Now palladium is trading at $1550 and above the price of gold.

A more notable example is platinum. Over the last 40-years, platinum has traded at a premium to gold about 85% of the time. In fact, in 2001, 2004 and 2008 platinum was more than double that of the price of gold. See platinum/gold ratio chart below.

PLATINUM/GOLD RATIO CHART

The platinum to gold ratio fluctuates greatly. It ranges from over 2.0 to the recent record low of 0.579 set in June 2019. It could go lower yet, but the probabilities favor an eventual mean reversion where platinum returns to at least parity or better with the price of gold.

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WEEKLY PLATINUM CHART

The weekly platinum chart is working on a bullish trend reversal. Prices have formed a series of higher lows since bottoming at $755 in August of last year. A sustained rally above $920 would support a breakout and complete the trend reversal.

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With platinum currently trading at $875 and gold at $1440, I think it’s just a matter of time before savvy investors take advantage of this price disparity. Especially since gold just broke free of its 6-year base.


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/