Gold Forecast: Prices Are Dropping Into The 6-Month Low

Friday, May 5, 2017

gold roller coaster

Precious Metals and miners are advancing toward their intermediate targets outlined in our April 21st exclusive: Gold Price Forecast - The Correction Into May Has Begun. The daily cycles are close to bottoming, and an interceding bounce is warranted. The short-term price objectives for DUST and JDST were satisfied.

The 6-Month Gold Cycle

Cycle analysis is perhaps the most useful tool for market timing. Recognizing where we are in the predominant cycle yields guidance and a near-term trading bias. Discerning the 6-Month Gold cycle is key to intermediate-term investing.

Cycles are a byproduct of human emotion. Extremes in investor sentiment define cycle tops/bottoms. In April, the gold cycle extended beyond my original forecast. Unexpected geopolitical events (Syria and North Korea) drove gold prices toward $1,300.

As the April cycle stretched, and I received fiery emails regarding my analysis. Gold bugs are a lively bunch, who candidly share their opinions. This type of irrational confidence frequently precedes market tops. Understanding behavioral finance is a necessary tool for successful investing.

Gold Price Chart

Below is a gold chart illustrating various 6-Month cycle lows. The current cycle peaked at $1,297, and prices are descending into the next low. I won't expect a bottom until the slow stochastics indicator slips below 20.

The Daily Gold Cycle

Typically, three to four daily cycles make up the larger degree 6-Month gold cycle. We are currently at a fork in the road and prices are likely to take one of two paths. Gold often takes the path least expected by investors.

Path-1) Prices bottom between now and Monday marking the third daily cycle low. An interceding bounce reduces bearish sentiment and the short-term oversold conditions. After a brief rally/consolidation, prices decline and settle into the 6-Month Cycle low. This scenario forecasts a bottom in June.

Path-2) Prices remain under pressure and grind incessantly lower (similar to last November). The 10-Day EMA keeps a lid on prices. Bottom pickers rack up losses demanding a bottom. This scenario implies a bottom in May. 

The results of Sunday's French election could set the course. How prices react Sunday night and Monday morning will provide essential clues concerning the near-term path. 


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AG Thornson

AG is the editor of 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