Gold Price Forecast: Global Market Selloff Risks Are Rising
The conflict with Iran is intensifying, and the shutdown of the Strait of Hormuz is a major wildcard that could spark a global market shock.
Oil prices broken higher from a four-year pattern, with crude poised to return to the $120 level—and a real possibility of surpassing $150 if the Strait remains closed for more than a month.
I anticipated that precious metals and mining stocks would reach new all-time highs in the second quarter. However, rapidly shifting geopolitical tensions and the risk of a broader market downturn could delay that trajectory.
WTIC WEEKLY: Crude oil has broken out of a four-year descending wedge pattern, signaling the potential for further upside. For all practical purposes, the Strait of Hormuz is effectively shut down, and prices could continue to surge the longer this disruption persists. A move back toward the $125 high reached following the outbreak of the Ukraine conflict is becoming increasingly likely, and a spike above $150 cannot be ruled out if the situation drags on into April.
GASOLINE WEEKLY: Gasoline prices are rising alongside crude oil and could surge in the coming weeks, adding significant upward pressure to inflation. As a result, the Federal Reserve may be reluctant to cut interest rates, even as labor market data begins to soften.
KOPSI Index
The South Korean KOSPI Index collapsed 18%, marking the worst two-day decline in its history. South Korea receives roughly 70% of its oil through the Strait of Hormuz, making it particularly vulnerable to disruptions. If the energy crisis deepens, I fear other markets could begin to crack. The risk of a global downturn increases with each passing day that the strait remains closed.
GOLD: Gold retreated after testing the $5,400 level, and prices now need to hold the 50-day EMA to avoid a retest of the February lows. The Iran conflict remains a wildcard and could put downward pressure on prices if a broad market selloff develops.
SILVER: Silver is testing the 50-day EMA and must hold support near $70.00 to prevent a deeper breakdown, which could result in an ABC decline and a possible backtest of the breakout zone between $50.00 and $55.00.
PLATINUM: Platinum must hold the $1,980 support level to avoid triggering a C-wave decline back toward the $1,600 to $1,700 range.
GDX: Miners tested the trendline and must hold support near $100 to prevent a deeper correction. Initial support lies near $92.00, followed by $84.50.
GDXJ: Juniors must hold the trendline to prevent a secondary decline. Support is at $120, followed by $110 if a breakdown occurs.
SILJ: Silver juniors need to hold the trendline to sustain upside momentum. A breakdown would open the door to a secondary decline.
Conclusion
Markets are highly vulnerable to significant disruptions in the coming weeks, which could trigger a liquidity event or broader systemic shock that temporarily pulls precious metals lower.
In the near term, I would like to see gold hold above its 50-day EMA near $4,850, with silver maintaining critical support around $70.00. Holding these levels would help preserve the potential for new highs in the second quarter.
AG Thorson is a registered CMT and an expert in technical analysis. For more price predictions and daily market commentary, consider subscribing at www.GoldPredict.com.
