Gold Prices This Week And Next Week's Forecast

Last week we wrote: Gold now sits between two critical lines. The momentum of last week should carry through with a move to “kiss” $1,308 early this week. But after that is anyone’s guess. We could just as easily see a retrenchment to retest $1,300 OR we could simply break through higher to $1,325 in the next five days.

Well, gold did retrench, but it plunged all the way to $1280, instead of just stopping at $1,300. Indeed, as far as gold bulls were concerned, last week was a rough one as gold fell right out the gate on Monday and pretty much didn’t look back. It ended the week down 1.85% to $1280.

There are a couple of reasons for this.

1. There are a number of rumors that President Trump might nominated either Kevin Warsh or John Taylor as the next Fed Chair. Both are fiscal hawks. As such, rumors of their potential appointment has ignited the $USD which in turn pushed old prices down.

2. The abject market rigging by the Bank of Japan (BoJ) has reached truly epic proportions. At this point the BoJ isn’t even trying to mask the market rigs, engaging at the same time every day (9:45) as well as any time stocks are breaking down. This rigging has hurt gold as it is highly deflationary for the financial system.

Have a look at the below chart of the Yen/ $USD pair (blue line) overlaid with gold (black line). The two practically move lock-step on a daily basis.

Having said all of this, the technical damage from last week was pretty severe. The September low of $1,273 is now in play as is $1,260. Put simply, the momentum is now down in the near-term.

We remain very bullish gold into year-end, but it looks like we need a final flush to get rid of the momentum players. That final flush should complete this week.

Graham Summers

Chief Market Strategist

Phoenix Capital Research

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