Gold Price Forecast – Approaching A BottomAfter peaking in September, gold entered an extended correction. Our cycle work suggests an impending low. The technical setup favors one final decline before prices bottom in early December.
Gold’s Cyclical Nature
As with any financial asset prices go through periods of range expansion and contraction – think of it like breathing. As prices rise, the market inhales – as they correct, it exhales. The natural progression in gold tends to shape bottoms every 6-months.
Below is a weekly chart of gold from 2007 to 2012. The blue arrows represent 6-month lows. Of course, not every cycle is equal, but take note of the cadence or rhythm to each low.
The Approaching Low
The last 6-month low arrived at $1267.30 in early May. The current technical setup favors one final decline into early December to complete this cyclical correction. During the next advance, gold should challenge $1600+.
The Close-Enough Approach
Picking the exact 6-month low is difficult, more so now than ever. Today’s markets are highly reactionary – a result of social media. One day stocks rally on thriving trade negotiations; the next day, they crash after a Trump tweet. Predicting these events is futile.
Consequently, I’ve adopted a “close enough” approach. When gold gets within striking distance to a 6-month low, I say close enough and begin adding to my metal’s portfolio. To determine the suitable “striking distance,” I wait for the Gold Cycle Indicator to drop below 100. The GCI closed at 94 Tuesday November 12th (currently back up to 118).
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, please visit https://goldpredict.com/