Gold Price Forecast: The Final Washout into an October Bottom

Gold 2022 vs. Now

In 2022, the Fed was hiking rates, and Treasury yields hit multiyear highs as we neared the midterm elections. We’re seeing a similar environment today; the Fed’s hiking rates and yields reached multiyear highs. Back then, rates peaked in October, and gold resumed its uptrend shortly after the midterm elections. I expect a similar outcome now: a little more downside in October before the uptrend resumes in November.

10-Year Yields

Gold remains under pressure as Treasury yields rally. The uptrend in precious metals is expected to resume once yields peak. Significant tops often form in October, supporting a major top any week now.

WTIC

Crude oil is climbing as Iran continues to strike tankers transiting the Strait of Hormuz, while the Houthis target Saudi Arabia, including Aramco’s headquarters. Consecutive closes above $100 could set the stage for a breakout above the trendline near $105, which would damage Republicans ahead of the midterms.

Gold

 Gold is on track to retest the midyear lows around $3,950 later this month. We expect this pullback to follow the 2022 pattern; thus a brief undercut of the July low is possible. We fully expect the uptrend to resume after the midterms and forecast gold reaching $7,000+ by the end of next year and $10,000+ by 2030.

Silver

 Silver is sliding sharply lower following Wednesday’s CPI report, with prices potentially reaching trendline support around $50.00 later this month. In our view, a pullback to that level would present a “back up the truck” buying opportunity.

Platinum

Platinum is on track to test support between $1,500 and $1,550 in October. We expect prices to bottom soon, with the uptrend likely to resume after the midterm elections.

GDX

Mining stocks surged more than 50% from July to August and are now approaching the breakaway gap near $80.00. Further downside remains possible, but we expect a bottom to form before month-end, followed by a strong resumption of the uptrend after the midterm elections.

GDXJ

After surging more than 50% from July to August, junior gold miners have retraced to the breakaway gap near $105. Further downside remains possible, with key support emerging around $100. We expect prices to bottom in October.

SILJ

Silver juniors have retraced most of their August gains, and prices could approach trendline support near $21.00 if silver retests critical support around $50.00 later this month.

Bitcoin

I see the potential for a broadening bottoming formation in Bitcoin if prices collapse below $75,000 before month-end. Such a breakdown could set the stage for a decline toward $54,000 in November.

Conclusion

Precious metals are entering the final washout phase into an October low. Sentiment will collapse once gold slips below $4,000, setting the stage for a bottom. The uptrend will resume once we get past the midterms, with miners likely leading the way higher.

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