Gold Forecast – Price Action Supporting Major Bottom

Last week I noted the potential for an approaching low in gold and a repeat of the 2018 bottom.

Gold miners finished last week with decisive bullish engulfing candles promoting that outlook.

With gold futures back above the September breakdown ($1680), the odds for a significant bottom are growing.

Gold Weekly Chart

After gold peaked at $1377.50 in 2016, prices consolidated in a sideways ABC correction for 25 months before finally bottoming in 2018.

I see the potential for a repeat of the 2018 bottom. It’s been 25 months since the August 2020 peak at $2089. Gold traced out an expanded ABC correction, and prices could be bottoming as we speak.

A bottom here would reinforce the potential for a vigorous advance into the next 4-year cycle peak due by mid-2024.

Gold Daily Chart

We have four drops from the March top, similar to the 2020/2021 correction. Gold undercut the $1680 support level, and the last few bulls capitulated. Progressive closes back above the $1680 breakdown level will strongly support a bottom.

Technical Non-Confirmation: Silver and Platinum never confirmed the September breakdown in gold thus supporting a bottom.

Silver Chart

Silver has been building a positive MACD divergence since May, and prices never confirmed the September breakdown in gold. We have a swing low, and a robust close above $20.00 would support a bottom.

Platinum Chart

Platinum also stayed above its early September low and never confirmed the breakdown in gold below $1680. Prices need progressive closes above the 200-day MA ($953) to confirm a bottom.

GDX Weekly Chart

Miners (GDX, GDXJ, and SILJ) formed large weekly bullish engulfing candles supporting a potential bottom.

Bottom Line

I see multiple factors supporting a repeat of the 2018 bottom. If gold recaptures and stays above $1680 in October, it might be off to the races. Welcome news for gold bugs.

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.