Gold Forecast: Gold Prices Are Close To A Bottom

Friday, May 18, 2018

fine gold

Timing is everything, especially in investing. Cycle analysis, technical indicators, and sentiment all point to an approaching low in gold. Gold prices could drop a little further, but a bottom is likely between now and Wednesday, May 23rd.

Miners are diverging unmistakably from gold. Prices remain well-above their February capitulation lows and propose a change in leadership. If correct, miners will outperform gold significantly in the coming months and break free from the extended consolidation.

Silver prices remain poised for a powerful advance. The breakout has been delayed, but a sharp rally to $25.00+ remains viable by late 2018 to early 2019.

Gold Prices

It's been 108-trading days (22-weeks) since the December low. Gold is rapidly approaching a tradeable bottom (6-Month low). Prices bounced off the 200-day MA and formed a bearish continuation pattern. The price objective for this formation supports a decline to approximately $1,270. I would have preferred to see prices remain above $1300. However, Tuesday's breakdown was probably necessary to achieve sentiment extremes consistent with notable bottoms. Previous failures below the 200-day generated reversals within a few trading days. Accordingly, our outlook prescribes a low between now and next Wednesday.

Silver Prices

Silver prices are also working on a 6-month low. Unlike gold, they have maintained their May 1st low. We could see one more dip early next week. Nevertheless, the prolonged consolidation should yield a robust advance when prices break above the blue trendline.

HUI:Gold Ratio

The HUI:GOLD ratio bottomed in March. A high-level consolidation is taking place that should result in a bullish breakout above .1405.

GDX

Miners have been building a base since February's capitulation low. Prices could dip a little further and bottom with gold. Miners should rally sharply once gold forms the 6-month low. Note: Gold fell below the February/March low. Miners remain above those lows diverging positively. The bullish recovery points to a change in leadership and end to the prolonged consolidation in miners.

WTIC

Oil has created short-term tops every 39-41 trading days. It's been 38-days since the prior cycle high, and a peak is likely next week. I'll be monitoring for a reversal on or around May 23rd.

In summary, metals and miners should be approaching meaningful lows. We expect a bottom between now and Wednesday, May 23rd. Silver and Miners should perk up after months of malaise. The gold cycle continues to make higher highs and higher lows; a stealthy uptrend is emerging. The ensuing advance should take gold above $1400 and install a new bull market in 2018.

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AG Thornson

AG is the editor of www.GoldPredict.com report and creator of the Gold Predict Color Code. His members receive frequent updates and commentary regarding the gold, silver, and mining sectors. At his heart, he is a technician and prides himself on making his analysis easy to understand through the use of adaptive and creative charting techniques. You can reach AG at info@GoldPredict.com.