Gold Price Forecast: Get Ready For A December Low

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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