GOLD BULL RUN TREND ANALYSIS (2/2) Dear Reader, This is part 2/2 of my Gold price forecast update (Part1 - Gold Price Breakout - Trend Forecast 2019 July Update). So the gold price has broken out of it's long-term trading range of $1370 to $1150. Which means $1370 should now act as a floor under the Gold price, else it's back into the range for several more years! Next resistance is at just above $1500 and then $1800 which is my long-term target for the Gold price as of December 2016. Therefore, as I stated in my May analysis, as the Gold price has now overcome resistance of $1350 to $1370 then the Gold price should be propelled higher towards a target of between $1500 to $1530. SEASONAL ANALYSIS The seasonal pattern has proved remarkably accurate so far this year! Which suggests we should see the Gold price pause going into August, so likely correct towards support of $1380 before the next power leg higher into early October, a correction during November to end the year on or near the high for this bull run. Add strong seasonality to strong price action then we could even see the Gold price reach my $1800 target THIS YEAR!
US Dollar A reminder that there tends to be an inverse relationship between the US Dollar and Gold. When the Dollar rises, the gold price tends to fall and visa versa.
So it should not be so surprising that the Gold price rallied strongly during June given the drop in the US Dollar.
However, the dollar rallying during July failed to dent the Gold bull run, which illustrates just how strong the current breakout is. Which suggests that the Gold price is reacting to the long-term pent up pressures of the Inflation Mega-trend. Remember folks all currencies are in a perpetual state of free fall which means exchange rate stability is an illusion. A quick technical take suggests that the US Dollar is unlikely to run much further as it approaches resistance at $100, from where a correction could see a retracement back to $95, a trend that will act like a trigger for the Gold price to bust through recent highs to attack and likely break $1525. TREND ANALYSIS
The gold price broke through resistance of $1350 and the 5 year resistance of $1370 which should now act as a floor. Nearest low is $1387. Therefore the Gold price has strong support between $1370 and $1390. In line with above analysis, the most recent price action is running out of steam which suggests that the gold price should correct into the $1370-£1390 zone before the next leg higher which should be as powerful as the trend from $1200 to $1450 i.e. $1390+$250 would take the gold price to well over $1600! MACD - The MACD is correcting from an overbought state which confirms that a correction is underway. RESISTANCE : Over head resistance is at the last high of $1454, which I would expect to easily break, with perhaps the Gold price only catching its breath between $1500 and $1530. Formulating an Updated Gold Price Trend Forecast The gold price HAS BROKEN OUT of a 5 year trading range. So the question many are asking is how high? Well a measuring move of the last swing, and taking that support at $1370 to $1390 will hold then it looks like the Gold price is heading north of $1600 on the next swing higher! Which means that resistance of $1500 to $1530 may prove fleeting probably similar to the brief pause at $1350 before the Gold price put on another 100 bucks. Immediate price action appears to suggests Gold price is correcting towards $1390 to $1370. However it may not be in much of a mood to trade down to that level before resuming its bull run. Gold Price Forecast Conclusion Update Therefore my forecast conclusion is to expect the Gold price to soon resume it's bull run. Before this analysis I would have expected resistance at $1500 by Late September / Early October. However, I now think that $1500 is not going to hold for long so it looks like the Gold price could be eyeing a break of $1600 by early October and to have at least reached $1570.
Peering into the Mists of Time I would not be surprised if the Gold price hits my long-term target of $1800 this year, possibly during Late December 2019. Silver Brief
I will cover Silver in greater depth in a separate analysis. But just to say that the Silver bull run will be leveraged to the Gold bull run. Where my long-term target is to reach at least $35. And given the current extreme Gold / Silver ratio, then Silver is CHEAP! The bottom line is that I see Silver as a coiled spring because in historic terms it is very undervalued against Gold and so I expect that spring to eventually propel Silver into an overbought state against Gold. (May 2019). This analysis was first been made available to Patrons who support my work. Gold Price Breakout - Trend Forecast 2019 July Update So for immediate first access to ALL of my analysis and trend forecasts then do consider becoming a Patron by supporting my work for just $3 per month. https://www.patreon.com/Nadeem_Walayat. Scheduled Analysis
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Your mega-trends investing analyst Nadeem Walayat Copyright © 2005-2019 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved. Nadeem Walayat has over 30 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis focuses on UK inflation, economy, interest rates and housing market. He is the author of five ebook's in the The Inflation Mega-Trend and Stocks Stealth Bull Market series that can be downloaded for Free.
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.
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Friday, 16 August 2019
GOLD BULL RUN TREND ANALYSIS
