Our primary forecast expects a top followed by a breakdown below $1660 this summer.
The Fed has been aggressively backing the economy. Last week, they announced they would begin buying individual corporate bonds, something they’ve never done. See Fed balance sheet below.
Liquidity seems to favor the high-flying tech sector with the NASDAQ near all-time highs. If the risk-on trade is back, gold may begin to take a backseat – it performs best when fear is high.
GOLD PRICE FORECAST
Overall, I think the 2020 consolidation could go on for another month. Eventually, prices should break below $1660, and approach our primary target between $1500 and $1550. A deeper correction to the secondary target ($1350-$1420) remains possible. Gold would have to rally sharply above $1800 to register an upside breakout.
I think we will see a better buying opportunity for gold later this year. Longer-term, demand for precious metals should increase as debt expands. Investors are beginning to wake up to this fact and are losing confidence in governments and their ability to manage. We believe gold started a multi-year advance that should last well into the decade.
Our Gold Cycle Indicator is near topping (currently 332), and an intermediate cycle peak is becoming plausible.
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.