Gold Forecast – The September Breakdown in Gold is BeginningIn Monday’s Gold Forecast, I noted that the triangle pattern was about 80% complete and that gold should peak near $1980 by Tuesday or Wednesday.
Futures hit $1983.80 on Wednesday and turned immediately lower. Next, we expect a collapse below $1900 to trigger the next 6-month low and subsequent buying opportunity.
Below is the triangle chart from Monday. As you can see, the trend adhered to the pattern boundaries, and prices peaked at the area labeled “e” a few days later. Gold should continue its way lower and break support surrounding $1900 by late September or early October.
The gold bulls have defended $1910 – $1920 aggressively throughout August and September. When that area finally gives, it could produce a sharp collapse below $1900. Our ideal target for the 6-month low surrounds $1750.
Longer-term, we are very bullish on precious metals and believe gold will enter a bubble. Please see our article: Are You Ready for The Bubble in Gold?
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 visit here.