Gold Forecast – Gold Confirms Breakout Despite Stubbornly Bearish Sentiment

This leads me to believe the current rally in precious metals has a lot further to run, and gold may exceed our forecast for $2000 by August.

GOLD BOTTOMED IN MARCH

In my March gold update, I wrote: “I’m looking for a bottom this week between $1665 and $1685”. It turns out prices bottomed a few trading days later at $1673.30 and smack dab in the middle of our target window.

As bullish as I was at that time, I felt even stronger about gold miners, which were insanely undervalued. Regarding GDX, I stated, “If I’m correct and precious metals started a new multi-year bull market, then this might be the last time we see GDX near $30.00 for a very long time.” I went on to say, “The time to be greedy is when others are fearful; I think we are almost there in gold.” That turned out to be timely advice as gold bottomed shortly after.

BEARISH SENTIMENT

Sentiment towards precious metals reached rock bottom in March. Even some long-time members were inclined to throw in the towel. I have been through hundreds of gold cycles, and anytime emotions get that raw, I know a bottom is close. I find it most surprising that I continue to receive bearish pushback despite the obvious breakout. Like a large ship, I guess sentiment turns slowly.

GOLD DAILY

After forming a beautiful double bottom in March, gold has broken out above the 9-month trendline and recaptured the 200-day moving average. Prices could exceed $1900 in the coming days. The next 40-day low isn’t due until late June, so we see plenty of room for near-term upside. Overall, this cycle should test the $2000 area and perhaps extend to new all-time highs before peaking around August.

GDX DAILY

Miners are leading gold higher and should extend above the 2020 high ($45.54) by July or August. Today’s robust 4.86% up day should be enough to shake any remaining bears.

Our Gold Cycle Indicator is just emerging from maximum cycle bottoming, suggesting the current advance still has significant upside.

In closing, gold miners should continue to lead and outperform gold over the coming weeks. Our Premium Metals Portfolio focuses on high-quality miners with excellent cash flow.

Near-term, I will be watching silver and platinum for a breakout to fresh highs. Their trends are primed and could explode higher.

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 regular updates, please visit here.