Gold Price And The Euro Forecast

August 22, 2016

Gold has managed to maintain a bullish structure since our last article. However, we still need to be cautious. Our gold forecast suggests a considerable rise could be about to begin…as it fits perfectly with a long-term impulse pattern we have been monitoring for over a year.

We remain bulls provided price can remain above the 20-day moving average -- and especially the 50-day moving average as shown in our chart above. Should price fall below the 50-day briefly,  then as long as the 20-day moving average can remain above the 50-day that would be fine. 

Should price manage to stay above our daily support, then we have some significant weekly and monthly markers to act as hurdles that gold will need to clear to continue to remain in a bullish trend and to confirm this bullish structural pattern.

Currently, everything is in alignement for this bullish pattern to play out. Nonetheless, our experience of gold is it has a habit of rising in a smooth and controlled manner. Moreover, a significant rise at this stage, whilst possible and currently on track would be out of character in terms of structure and past history.

So we are cautious on a longer-term basis, because a significant advance at this stage would represent a rare event in terms of pattern structure but also a significant event in terms of global financial events.

However, we believe that some of gold’s rise at the turn of this century was in part due to the threat that the Euro represented to the Dollar as the global reserve currency. It wasn’t that long ago that everyone was singing the praises of the 500 euro note…and the dollar was going to the dogs. Whilst the Euro out-performed the Dollar, gold also rose. However, since then the Euro has sunk…but so has gold.

From a macro perspective there is not a lot to be bullish about in the Euro area. More bailouts will shortly be required, banking failures are common place, unemployment is high, growth is weak and a structurable finacial imbalance needs to be resolved. However, politics prevents sensible measures from being taken. On the other hand the US looks to be in far better shape on a relative basis, the least dirty shirt in the laundry basket.

Below is our current EURUSD forecast, which shows little sign of an upsurge in the Euro at this stage. Indeed it shows the possibility of much more weakness. We also have long-term forecasts for the Dollar Index -- and there isn’t much sign of Euro strength there either.

Now there is always the possibility that gold and the Dollar could rise in tandem. This would represent a significant event. First this would see the price of gold rise extremely quickly in Dollar terms, but even faster in most if not all non dollar currencies.

However for now we will stick with our macro perspective that a much weaker Euro and a stronger Dollar reduces the need for gold to act as a countermeasure. So this is our hope for the best…but prepare for the worst article with the worst shown below.

So with that in mind we offer an alternative forecast pattern more in line with continued Euro weakness, which would see a further decline in to 2017 before a final low and the start of a bull leg that would last for over a decade and lead to a significant rise in price this pattern would be more in tune with golds past history.

Our bearish forecast pattern above shows that in the event we begin to see a decline, possibly a double top over the weeks ahead, then the bears will have to take out the 20 and 50-day moving averages first -- and then take the 20-day below the 50-day moving average, we think that would be significant.  If our 2017 low were to materialise, there should be plenty of warning with at least a bounce before we drop.

We remain long-term gold bulls. Moreover, our longer-term forecast patterns give us the confidence to not worry about any decline that may come first -- as it would represent a significant buying opportunity and a bigger base for an even bigger price rise than our more immediate bull scenario would be able to manage.

As with all our forecasts, we offer a road map for the trader and investor to monitor and to include in their general strategy. Our subscribers also get to see our longer-term weekly and monthly forecasts, which adds even more information plus significant weekly and monthly markers to give you an even greater edge.  

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You can read more about our unique foresting system and moving average momentum analysis at our website: http://www.kenticehurst.com

Ken Ticehurst been a gold trader for over a decade and is currently developing a unique gold price forecasting system using fractal analysis and unique algorithms. He creates forecasts using different patterns that occur over daily, weekly and monthly time frames. In his view news does not move prices over the long-term, but rather that prices move news over the long-term. Human nature demands an explanation for every price move. It is his philosophy that day to day and even week to week moves are just noise disguising the long-term trends.
 
Ticehurst has a BSc.(Hons.) in Product Design from the University of the West of London with a commercial background in data analysis and research. Ken has been involved in markets as diverse as classic cars, construction and real estate.  He has seen bubbles grow and deflate time and again, subsequently giving birth to his galvanizing interest in the underlying sentiment that drives the fear and greed phases.  Ken’s website is:  http://www.kenticehurst.com

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