Gold Forecast: Recession Remains Likely as Gold Nears a Breakout

Technical Analysis Expert & Editor @
July 31, 2023

gold forecast

Multiple factors support a recession starting in the second half of 2023 and lasting well into 2024.

Record business tax refunds are keeping employment healthier than it otherwise would be.

Gross Domestic Income turned negative in the fourth quarter of 2022, corresponding with a recession 100% of the time.

Business bankruptcy filings are nearing levels not seen since the 2008 great financial crisis and will likely worsen.

Market sentiment has reached extreme bullishness, and the consensus now believes we avoided recession.

Employee Retention Tax Credit

The employment market has been resilient partly due to the Covid Employee Retention Tax Credit of 2020. Even though it expired in September 2021, qualified businesses can still file paperwork retroactively and receive claims throughout 2023. Employers receive up to $26,000 per employee. Tax refunds soared to $30 billion last month. Once this ends, employers will have no choice but to reduce headcount.

Tax Receipts Plunge

Tax receipts are plunging, and this rarely happens outside of a recession. As businesses and individuals make less money, they pay fewer taxes guaranteeing an economic slowdown and more deficit spending. Will this time be different, or are we on the precipice of a recession?

Jobless Claims Bottoming

Jobless claims could spike from here. Treasury bill yields rose from 0% to 5.42% in 1.5 years. Historically, a spike in unemployment soon follows. The Employee Retention Tax Credit has bought some time, but it's only delaying the inevitable.

Bankruptcy Filings Soar

Bankruptcy filings for companies with over $50 million in liabilities are exploding higher, and we haven't even entered a recession. I suspect this number could shoot to all-time highs as zombie companies surviving on low-interest rates for the past decade finally shutter.

Gross Domestic Income (GDI)

Over the last 80 years, the economy was near recession when GDI turned negative 100% of the time. It's been negative for two quarters now and will likely slip further. A recession seems guaranteed unless this time is different.

Market Sentiment

In 2022 everyone was calling for a recession, including myself. That didn't sit right with me because the consensus is almost always wrong. Now, everyone is starting to believe we avoided recession or, at worst, we may have a soft landing. With sentiment firmly on the other side, I'm confident the economy is headed for a hard landing.

The Gold Cycle Indicator finished at 112. The intermediate cycle bottomed in late June, and we expect a rally into September.

GOLD- Gold futures changed to the front month contract, and that's why prices finished the week near $2000 - spot gold is closer to $1975. Whenever futures significantly outpace spot, prices typically converge higher. With the Fed meeting behind us, I'd like to see notable upside follow-through in August. 

SILVER- The pullback in silver held the 50-day EMA, and this is where I'd expect the next up leg. Continued downside with progressive closes below $24.00 would be concerning. 

PLATINUM- We've had a fairly deep pullback in platinum, and prices need to turn higher quickly to prevent further downside. 

GDX- The pullback in miners was deeper than anticipated, but all is not lost if prices hold Thursday's $30.33 low. Next week I'd like to see prices close back above the 50-day EMA to support a local bottom. In contrast, additional downside would be concerning and would open the door for a failed cycle. 

GDXJ- Assuming this was a standard three-wave (ABC) pullback, juniors should turn higher from here. Closing back above the 50-day EMA would support a local bottom. 

SILJ- Silver juniors retraced 50% of the advance out of the cycle low, and prices need to turn around quickly to maintain momentum. Closing below the 61.8% retracement ($9.64) would threaten cycle integrity. 

WTIC- After months of consolidation, oil is surging higher just as inflation cools. A breakout above the $83.50 level would support a run to $90+ into year-end. 

GASOLINE- Gasoline futures are breaking out of the rounded bottom, and more upside is expected. Things could get worse if we see significant hurricanes in the Gulf. 


After a brief pullback, metals and miners should continue higher from here. If gold breaks above $2100, as forecasted, we think it could race towards $3000 in 2024. Miners remain deeply undervalued and could explode to the upside over the next 12 to 18 months.


AG Thorson is a registered CMT through the MTA and an recognized expert in technical analysis of the precious metals markets. He is also the Editor of where 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 [email protected].

Gold weighs 19.3 times as much as an equal volume of water.
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