Gold Price Forecast – Are Gold Miners Signaling a Breakout in Precious Metals
A sustained breakout in gold miners could signal a major bottom in precious metals, in our opinion.
-GDX DAILY CHART- Technically, miners are back above the critical breakdown level of $31.00, supporting the potential for a bullish undercut low or bear trap. A sustained breakout back above the 200-day MA could signal the beginning of the next leg higher.
GDX LONG TERM: The weekly chart of GDX illustrates the significance of the $31.00 price level. It took GDX seven years (2013 to 2020) to breakout above $31.00. After the post-Covid spike, prices extended too far too fast and have been correcting. Recently, GDX broke below $31.00, but that breakdown was fleeting (possibly a bear trap). Prices have since recaptured the $31.00 support level, and I see the potential for a significant bottom if prices maintain $31.00.
-BARRICK GOLD- One factor supporting the potential for a significant bottom is the 3-year cycle in Barrick. It seems every third September (2012, 2015, 2018, 2021?), Barrick reverses the recent price trend. In this case, prices may have formed a significant bottom in September 2021.
GOLD FUTURES DAILY: The intermediate gold cycle bottomed in early August. A breakout above the 12-month downtrend line could signal the next leg higher in precious metals. Until gold futures clear $1900 to $1925, precious metals remain vulnerable to more sideways consolidation.
Our long-term stance remains firmly bullish on the yellow metal and believes gold will reach $7,500 to $10,000 in USD terms by the end of this decade.
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.
For a look at all of today’s economic events, check out our economic calendar.