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Gold Price Forecast – Prices Grapple With $1550

Gold is testing the 2013 bear market inflection point at $1550. The trend appears to be slowing after rallying $300 since May. Silver has taken the torch and is leading gold higher; that often occurs towards the end of an intermediate cycle advance.
AG Thorson
Gold and Silver bars

Gold is testing the 2013 bear market inflection point at $1550. The trend appears to be slowing after rallying $300 since May. Silver has taken the torch and is leading gold higher; that often occurs towards the end of an intermediate cycle advance.

Gold is testing the 2013 bear market inflection point at $1550. The trend appears to be slowing after rallying $300 since May. Silver has taken the torch and is leading gold higher; that often occurs towards the end of an intermediate cycle advance.

Near-term, gold futures would have to close below $1535 to flag a potential top. A subsequent breakdown below $1500 would validate a cyclical high and the beginning of a multi-week correction.

Technical Picture

GOLD DAILY CHART- Prices formed a clear reversal candle on Monday after spiking to $1565. Futures held support at $1535, and there was no bearish follow-through. To support a terminal spike high, gold needs to close below $1535 then break support at $1500.

SILVER DAILY CHART- After a mid-August consolidation, silver broke sharply higher above $18.00. Prices are now leading gold. The next level of resistance arrives between $18.30 – $18.65. As long as gold remains below Monday’s $1565 high, the move in silver is vulnerable.

SLV:GLD RATIO- As prices approach cyclical turning points, I often refer back to the ratio charts for clues. The recent rally in silver propelled the ratio back to the bearish trendline. It’s make or break time for silver. A failure here would support a multi-week pullback in precious metals.

The trends in precious metals are undoubtedly stretched, and a correction is justified. A daily close in gold futures below $1535 would support a potential top. Intermediate traders should consider taking profits on longs — no sense in being greedy.

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 here.

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