Gold Forecast: Temporary Correction Followed by a Breakout Above $2000

Technical Analysis Expert & Editor @
February 10, 2023

fine goldAfter last week's employment report, markets are now pricing in 0.25% rate hikes in March, May, and potentially June.

Stocks and risk assets continue to fight the Fed, refusing to believe Powell will get rates to 5.00%+ and keep them there all year.

A near-term breakout in 2-year Treasury yields could put temporary downside pressure on metals and miners.

After a brief pullback, we expect gold to rally and breakout above $2000 in the second or third quarter. 

Rate Hikes

The odds for a 0.25% rate hike in March are at 100%, and another 0.25% bump in May jumped to 78% over the past 30 days. The market is now pricing in June at 34.4%. We can expect Fed funds to reach a minimum of 5.00% to 5.25% in the second quarter of 2023.


2-Year Treasury Yield

The 2-year Treasury yield broke above the recent consolidation pattern and could extend to new highs above 4.80% in the coming weeks. Rising short-term rates are a short-term headwind to gold.

Yield Curve Update

Below is the 10-year minus 2-year Treasury rates (yield curve) from the Federal Reserve Bank of St. Louis. A recession (gray vertical lines) is virtually guaranteed when it drops below zero. The current reading slipped below zero last July. Note: The last four recessions (red arrows) started AFTER the yield curve normalized back above zero.

Take Away: With a current reading of -0.82, I think we are several months away from the official onset of a recession. The bad stuff starts showing up in the economy AFTER the yield curve rises back above zero. I won't get excited about a lasting bottom in the stock market until the yield curve normalizes to at least +1.00%.

Our Gold Cycle Indicator is in Neutral territory at 178.

-GOLD- Gold rallied about 22% off the November low, and prices are correcting. The depth and duration of this correction are anyone's guess. Some corrections are sharp and fast - while others grind sideways to lower for several weeks. The first indication of a possible bottom will be a swing low.

-SILVER- Silver rallied over 40% off the September low, and prices are correcting. I'd like to see a cycle bottom between $21.00 and $22.00 in the coming days/weeks.

-GDX- Miners were unable to breakout above $33.00 on their first attempt, and prices are correcting. To maintain pattern symmetry, I'd like to see prices hold support around $29.00. A breakdown below $29.00 would encourage a retest of the 200-day MA.


We believe gold formed a major bottom in 2022, and prices are in the first phase of a multi-wave advance towards $3000 by mid-2024. The next 4-year cycle peak in gold should arrive ahead of the 2024 Presidential elections. 

AG Thorson is a registered CMT and an expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more charts and regular updates, please visit here.


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].

The Federal Reserve Bank of New York holds the world's largest accumulation of monetary gold.
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