Gold Forecast – October Support Levels and Breakpoints

GOLD FUTURES 4-HOUR CHART: Gold futures are consolidating in a potential bull flag on the 4-hour chart. Upside follow-through above the 1-month trendline (currently $1770) would support a short-term bullish breakout. Progressive closes above $1840 would signal a meaningful bottom. On the bearish side, continued weakness below $1720 would promote a retest of the $1675 area and increase the odds for a temporary breakdown to $1550.

Update on Fed Policy: If the Fed tapers in 2022, that lack of demand (buying of Bonds and Treasuries) will cause interest rates to rise. Higher interest rates rise, combined with slowing growth and persistent inflation, will choke the economy causing stagflation. The Fed will have no choice but to keep buying bonds in 2022 to suppress interest rates.

When the above outcome becomes clear, the bond market will tank (everything the Fed is not buying), and precious metals (hard assets) will soar. It’s just a matter of time, in my opinion. Consequently, I view the current pullback in precious metals as a long-term buying opportunity – not a time to panic sell.

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.