Gold Futures Hit Record High: A Projection for Continued Growth in 2023
Based on the continuous contract of gold futures which merges the most active contract month into the next most month active month broke the record high today. Closing at $2091.30, after factoring in today’s gain of $35.10 or 1.71%. The highest close on record for the continuous futures contract occurred on Thursday, May 4 when gold futures hit an intraday high of approximately $2083 and closed at approximately $2059.
2023 Gold price projection
With this in mind, it is quite realistic to assume that gold could continue to challenge its record-high close. The chart above is a projection created this week using a combination of Elliott wave theory and Fibonacci extensions. It uses a model based on the ratio of impulse waves three and five. The most simplistic model states the relationship of the price gains in wave five is approximately 0.618% of the price gains found in wave three. Using this methodology, it is projecting the high to be achieved after a major Supercycle from 1975 to 2023 to be $2072.
Deciphering Gold’s Super Cycle: A 2016 Study and Projections Revisited
In 2016 I co-authored a piece with my son Joseph Wagner titled “Gold’s Super Cycle” in Technical Analysis of Stocks and Commodities (TASC) in which we put forth a model of gold’s super cycle that began in the 1970s following Nixon’s final step to abolish the gold standard. The decoupling of gold and the US dollar kicked off a supercycle in the precious metal spanning over 50 years, the impulse phase of which (waves one through five) could have very well been completed today.
2016 Super Cycle study and projection
In the publication put forth by us approximately nine years ago, we predicted that we were in the fifth wave of gold’s Supercycle and that the fifth wave would conclude at approximately $2063. Today’s closing price in gold futures came within the margin of error of those projections. This study illustrates the power of Elliott wave theory and the Fibonacci sequence and suggests that gold may have concluded its fifth wave as well as its current rally. So does this study predict that gold will not trade any higher?
The simple answer is that on a long-term basis, no. However, on a short-term basis, it is very plausible. This is because gold will likely enter some sort of a correction (A, B, C) before beginning a new bullish Supercycle, as long as no new fundamental change occurs.
Gary S. Wagner has been a technical market analyst for 35 years. A frequent contributor to STOCKS & COMMODITIES Magazine, he has also written for Futures Magazine as well as Barron’s. He is the executive producer of "The Gold Forecast," a daily video newsletter. He writes a daily column “Hawaii 6.0” for Kitco News