Gold Price Forecast: War Risks and $200 Oil Could Ignite Gold’s Next Bull Run
The conflict involving Iran is moving further up the escalation ladder, and White House advisor Robert Pape warns that we may be caught in an escalation trap.
According to Pape, the next phase (stage 3) could involve U.S. boots on the ground in Iran, a development that might trigger retaliatory terrorist attacks on U.S. soil.
Iran has also suggested it wants oil prices to reach $200 per barrel. As a result, even if Trump were to step back, the Strait could remain closed until Iran secures concessions it considers sufficient.
Precious metals could come under pressure if the stock market declines sharply. However, any such weakness would likely be brief, and a renewed safe-haven bid could push gold to new all-time highs later this year.
2-YEAR TREASURY YIELD
The weekly chart of the 2-year Treasury yield is breaking higher from a multi-year consolidation, supporting the return of inflation.
WTIC
Oil is rising, and in my view there’s no logical reason for it to be trading below $100. If Iran achieves its $200 price target, it could have catastrophic effects globally. Even if the U.S. declares victory and backs away, Iran would likely keep the strait closed until it gets what it wants. Consequently, I believe this conflict could drag on for months, resulting in global market weakness and spiking inflation.
GOLD
Gold slipped nearly 2% Thursday, and prices must hold the 50-day EMA to prevent a retest of the February lows. A broad market sell-off could initiate short-term selling, but I doubt it would last more than a week or two before triggering a flight to safety.
SILVER
Silver needs to hold above its early March low near $78.00 to prevent a retest of support around $70.00. In the meantime, prices are digesting the explosive move from Q4.
PLATINUM
Platinum needs to stay above $1,980 to avoid triggering a C-wave decline back towards $1,600.
GDX
Miners are back near trendline support, and prices must hold Monday’s $95.96 low to avoid an intermediate-degree breakdown. If the S&P 500 turns sharply lower, it could negatively affect mining stocks.
GDXJ
Juniors are back at trendline support and must hold $127.79 to avoid an intermediate breakdown toward the $110–$120 range.
SILJ
Silver juniors need to hold above Monday's 431.88 low to prevent a potential breakdown below $30.00.
S&P 500
After Monday’s miraculous recovery, stocks are rolling over into what could become a 10%–20% correction into mid-year. Unfortunately, a weak stock market could place increased selling pressure on metals and miners despite rising geopolitical tensions. The line in the sand for me is the November 6,520 low; a break below that would promote a breakdown towards 6,000 or lower.
BITCOIN
Bitcoin remains resilient despite increasing pressure on risk assets. The 2022 analog suggested we should be breaking below $60,000 around now, and, frankly, I’m surprised it hasn’t happened yet. If prices fail to make fresh lows in March, a new pattern may begin to emerge. From a 4-year cycle perspective, I’m still not expecting a final bottom until October.
In Summary
Expect increased volatility for the foreseeable future as each side climbs the escalation ladder.
A spike in oil to $200 could trigger a global liquidity event and market selloff, potentially dragging metals and mining stocks temporarily lower.
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.
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