Gold Price Forecast: Plunging Sentiment Could Trigger Intense Snapback Rally

Technical Analysis Expert & Editor @ GoldPredict.com
November 24, 2021

gold price forecast

  • Precious metal plummeted on Monday after Biden reappointed Powell to the Fed.
  • Prices are dropping into a cycle low and should find support in the coming days.
  • Sentiment may finally be shifting in golds favor. I see the potential for a strong snapback rally heading into 2022.

Consumer Shortages 

If you haven't had a chance, check out the 60-minutes special on the Supply Chain Crisis. It paints a potentially grim picture for the Holidays. Small suppliers are struggling to get inventory. If this is their time of year to turn a profit (black Friday), how will they fare if they have nothing to sell?

Consumer Sentiment

With used autos at record prices, housing unaffordable for new buyers, and inflation at 30-year highs - no wonder sentiment is tanking. In the chart below, sentiment dipped below the 2020 pandemic bottom and is near a 10-year low.

Vaccine Effectiveness

According to Public Health England, ages 40 to 80 are on average 40% more likely to contract Covid-19 than the unvaccinated. Granted, this is just a snapshot of weeks 33 to 36 of the pandemic, but it makes you wonder...why force vaccines on citizens if they don't slow or stop transmission?

Note: The same data shows vaccines have proven effective against hospitalizations and death, just not transmission. 

Markets Amiss

If you told me annual CPI in the US was 6.2% and the 10-year Treasury was yielding just 1.65%, I'd call an ambulance...for you are clearly having a medical emergency. 

It makes zero sense. How can 10-year paper be paying -4.55% below inflation, and gold is not soaring? Mind you, "real inflation" is probably double the government's watered-down version, so that makes it even more outrageous.

  • With real returns deeply negative, gold should be trading at new all-time highs, in my opinion. 
  • Because it is not, prices may be setting up for a tremendous snapback rally out of the next low. 
  • As social tensions rise over consumer shortages, eye-popping inflation, and vaccine mandates - gold should begin to shine in December.

Gold Price Daily Chart

Gold prices peaked in mid-November, forming what appears to be a triangle pattern. Cycle-wise, I'm expecting a bottom between now and the first week of December. It feels like we are one news event away from a sharp reversal higher. Prices would have to break below $1720 to represent something more bearish.

Gold Cycle Update

Biden kept Powell in charge of the Fed, and gold prices are correcting into a 4-month low (pink arrows). The shorter 36-day cycle (light blue) is also due around now. With gold prices already below $1800, it looks like prices may come down to test the lower triangle boundary near $1740. Given this scenario, I suspect gold will bottom between now and the December 3rd employment report.

Note: We had a similar dual-cycle in late November last year. Provided accelerating inflation data, I suspect gold will break upward from the triangle pattern in late December or early January 2022.

Bitcoin Daily

Bitcoin is consolidating just above the $56,000 level. Near-term, prices need to break above $62,000 and then above $70,000 in December to support new all-time highs.

A continued breakdown below $56,000 would open the door for a retest of $48,000, with final support arriving at $40,000.

Have a safe and pleasant Holiday!

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

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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 GoldPredict.com 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].

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