Gold Price Forecast: Get Ready For A December Low

Friday, November 22, 2019

fine gold blocks

The correction that began in September is nearly complete, and gold should bottom in the opening days of December. The current pullback is nothing more than a normal cycle correction. Once gold bottoms, we expect an advance to $1600+ in the first quarter of next year.

First, I'd like to start by explaining the 6-month cycle in gold prices. Prices tend to form tradable lows about every 6-months (blue arrows in chart below) – I like to think of it like breathing. In bear markets, the 6-month lows work progressively lower - In bull markets, progressively higher.

After a prolonged basing pattern (2013 -2019), gold prices exploded above resistance at $1400 in June 2019 and launched a new bull market. The current pullback is the first 6-month cycle correction after that breakout, and in my opinion, an outstanding buying opportunity.

In my article, The Potential For One More Decline, I explained how the cycle was incomplete and still required a breakdown below the $1465 low. Prices peaked in the opening days of November and subsequently broke the October low. With that out of the way, the short-term pattern appears to be setting up for one final decline into early December. 

Daily Gold Chart

After a brief consolidation, gold prices are now set up for the final decline into a 6-month low. All we need is a little downside follow-through below $1455 (possibly next week). The 200-day MA is the ideal target as it crosses $1400. 

I've outlined a +/- $20.00 target box in the chart above. If prices don't bottom during the first week of December, then I'll look for a bottom around the December 11th Fed announcement. I may have to adjust the target once I see the initial reaction lower.

Our Gold Cycle Indicator (GCI) was explicitly designed to navigate the 6-Month cycle in gold. When it drops below 100, it means prices have met the minimum requirements for a bottom — the lower the number, the better the buying opportunity. A test of $1400 in early December should send the GCI below 50 and into maximum bottoming.

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 https://goldpredict.com/

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AG Thornson

AG is an accredited CMT through the MTA and the editor of GoldPredict.com. His members receive daily updates and regularly scheduled reports 3-days a week. He prides himself on making his analysis easy to understand through the use of adaptive and creative charting methods. You can reach AG at info@GoldPredict.com.