After peaking at $1923.70 in 2011, gold entered a massive 10-year basing pattern. Surprisingly, the design has remained oddly symmetrical. In June 2019, gold broke above $1400 and completed the 6-year rounded bottom. The current advance should terminate around $1800, and we could get a multi-month consolidation with support around $1500. Once the consolidation has concluded, gold should break above $2000 and push upward to new all-time highs.
GOLD BIG PICTURE CHART
A multi-month consolidation is likely to begin between $1500 – $1800 as gold stores up energy to break out to new all-time highs in 2021 or 2022. Longer-term our forecast calls for $8,500 – $10,000 gold later this decade.
The immediate upside in gold may be somewhat limited, but that does not mean miners cannot breakout – they have been lagging gold since 2016. A successful breakout in the coming days/weeks would signal the next stage of the bull market as miners play catch up to the price of bullion.
You will see in the charts below that miners have been building a sizeable multi-year base below the 2016 highs. Prices are challenging key resistance now, and a breakout is possible in the coming days/weeks. If prices fail to breakout, then they will likely drop back to test their March lows.
The XAU mining index has been building a base just below the 115 level. A confirmed breakout above 115/120 would support a bullish advance towards 190 kicking off the next phase of the bull market. Failing to break out above 115/120 in the coming days/weeks would send prices back down towards 60.
The set up in the HUI mining index is similar. A breakout above the 280/300 level would support an immediate advance back towards 500. Failing to break above 300 would send prices back down towards 160.
Our gold cycle indicator finished the week at 372. We are at a level where gold may begin to form 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.