Several weeks ago, I noted that gold was repeating its 2016 and 2018 consolidation patterns. In line with our forecast, gold reached $1796.10 on Wednesday, and an interim top is becoming likely. Next, we are looking for a breakdown in July, followed by the next great buying opportunity.
As a technician, I am continually on the lookout for recurring or repeating patterns. In April, I noticed gold was setting up for a repeat of the 2016/2018 consolidations. Meaning, as long as gold stays below $1800, then a decline back towards $1500 is likely.
Gold Price Forecast
Typically, intermediate consolidations last anywhere from three and four months. If prices peak around $1800, this is what I will expect over the next several weeks.
1) A breakdown below $1660 in the last half of July.
2) A bounce off the 200-day MA and failed attempt to recapture $1660 – $1670.
3) A final decline towards $1500 and the next great buying opportunity.
Gold Big Picture
Longer-term, I am are very bullish on gold. The above forecast dovetails nicely with our larger 10-year pattern. To maintain symmetry (on the right side), gold should consolidate between $1500 and $1800 into 2021 before breaking decisively above $2000. Ultimately, I think gold could reach $8,000 – $10,000 later this decade.
Fundamentally the case for gold has never been better; prices are in a bull market. However, as volatility increases, attempting to time each swing will become increasingly more difficult. One mistake could cripple your trading account. Consequently, I shifted to a long-term accumulation strategy aimed to reduce stress and improve long-term gains.
Our Gold Cycle Indicator is at 440 and within maximum topping. A cycle peak is becoming likely.
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.
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