Gold Forecast: Gold Prices Are Near An Important Low

Wednesday, May 9, 2018

gold analysis

Gold slipped to the 200-day MA ($1,306.20) on Tuesday but quickly found support. Prices now need to break above $1,320 to promote a crucial 6-month low. We alerted members and entered initial positions before Tuesday’s close.

Gold prices may have bottomed May 1st at $1,302.30, but that low is unconfirmed. However, subtle clues are building in miners and silver that may result in a sudden break higher. For this to remain a possibility, prices must defend Tuesday's lows.

There is always a period of uncertainty surrounding the 6-month cycle lows. Enter too early, and you risk a whipsaw or drawdown. Enter too late, and you reduce profits and chase prices higher. It's rare to time the low perfectly. Therefore, traders need to develop a strategy suited to their risk tolerance.

It would be incredibly bullish if gold’s 6-month cycle bottomed above $1,300. If true, then gold prices should break easily above $1,400 during the next advance and establish a new bull market. Silver and Miners should play catchup and lead gold.

Gold

Gold prices are pinned between the 10 and 200-day MA's. Tuesday's Doji reversal candle supports an upward breakout. Closing above $1320.10 in the coming days will recommend a 6-month low at $1,302.30. Revoking Tuesday's reversal and finishing below $1,306 would indicate one more decline into mid-May.

Silver

Silver prices reversed the morning slump. If $16.07 is the 6-month low, we should see a breakout above $16.62 in the coming days. Closing below $16.33 would nullify today's bullish reversal.

HUI – Gold Ratio

The HUI:GOLD ratio reversed and found support at .135. Holding today's low would encourage a bullish breakout above .1405 in the coming days.

GDX

Prices continue to bump up against the 200-day MA. These types of patterns usually break piercingly higher if resistance fails. Think of the 200-day as a levy. The levy is holding for the moment but the water (momentum) building. If the levy (200-day MA) breaks, prices should move swiftly higher. For that reason, I felt initial positions were indicated.

GDXJ

The action in juniors looks like a bullish consolidation pattern. Prices are holding the 10-day EMA. An upward breakout is favored as long as prices don't close below Tuesday’s $32.92 low.

JNUG

I see bullish potential. Closing above $15.41 would be constructive.

USLV

The 10-day EMA is acting like a levy. Pressure is building, and a sharp move higher may occur above $10.10.

SPY

Stocks are consolidating in a pattern of lower highs and higher lows; essentially a triangle. Prices would have to break above the upper boundary and close above the 271.30 high to justify more upside. Declining below the 200-day MA and closing below the lower border would likely trigger a selling event down to around 240.

WTIC

The next 39-41 day cycle arrives May 23rd (+/- 1-day). The odds favor a top around that time if oil holds above the $66.50 breakout. Closing below $66.50 would likely project a rapid decline into a May 23rd.

I'll maintain a bullish outlook if gold holds above Tuesday's low. Breaking below $1306 would support one final decline into mid-May.

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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.