Gold Price Forecast – Hawkish Fed Comments Point to Further Downside in Metals

• After a brief rebound, metals and miners turned lower following Wednesday’s hawkish Fed announcement, potentially setting up a final breakdown into our mid-year target zones.
• The dollar is the key driver going forward. A sustained breakout above 101 could open the door to a deeper correction in gold before a final bottom. In that scenario, silver would likely fall back into the $50s.
• It typically takes two full trading days after a Fed event to establish near-term direction. With markets closed on Friday, we’ll need to wait until early next week to determine whether this was just a shakeout or the start of the next down leg in precious metals.

Gold Cycle Indicator

The Gold Cycle Indicator finished at 55.

US Dollar

The dollar rallied after Wednesday’s Fed announcement, and upside follow-through above 101 would be near-term bullish. A confirmed breakout could drive a move towards 103 – 104, which would likely be a headwind for precious metals.

WTIC

Oil slipped back to the 200-day moving average, which is where I would expect to see some support. It will take time to determine whether ships are exiting the Strait of Hormuz, and even then, it takes several weeks to months for cargoes to reach their destinations. In the meantime, inventories will continue to be drawn down. In short, I’m not convinced the energy shock is over.

Gold

Gold completed a swing high following Wednesday’s Fed comments, and prices have officially entered our mid-year target range. It is starting to look like this move was just a bounce before one final dip into a low. We will know more once we see how prices react early next week.

Silver

Silver officially entered our target range after a brief rebound. To support further downside, we would need to see prices continue lower early next week, which would support a breakdown below $60.00 into month-end.

Platinum

Platinum is deep inside the target range, and downside follow-through early next week would likely prompt a move toward $1,600 to fill the November price gap.

GDX

Miners rallied more than 20% in a week, opening a massive price gap at $80.00. The post-Fed reversal at the crossover of the 50-day and 200-day moving averages is short-term bearish, and I expect prices to at least fill the gap at $80.00. A deeper pullback into the target range remains a possibility as we head into July.

GDXJ

Juniors reversed sharply lower after Wednesday’s Fed announcement. A close below the price gap at $104.25 next week would support a move into the target area as we head into July.

SILJ

Silver juniors rolled over below $31.00 and formed a swing high. A close below the $27.15 price gap next week would support one final dip into our mid-year target range.

S&P 500

Stocks rebounded after Wednesday’s sharp decline. I see the potential for an exhaustion gap, and a close below 7,394 at any point next week would strongly support a secondary top and the beginning of a new down leg.

BTC/USD

I see the potential for a bear flag in Bitcoin. Initial confirmation would come with a close below $63,000, with final confirmation below $59,000. If established, the initial target would be around $50,000 (+/- $2,000).

In Closing

The price action early next week is crucial. If metals and miners continue lower on Monday or Tuesday, the odds of one final dip into July increase significantly. I will monitor key technical levels and advise members throughout the week.

If the dollar sustains a breakout above 101, I may need to pivot to the alternative scenario, which could drag gold closer to $3,500 and later into Q3. In that event, I would expect silver to bottom closer to $50.

AG Thorson is a registered CMT and an expert in technical analysis. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.