Latest Gold Price Forecast & Predictions
Period | 2 Days | 3 Days | 1 Week | 2 Weeks | 1 Month |
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Change | -1.41% | -3.64% | -3.18% | -4.45% | -5.54% |
Gold Price Forecasts - Analyst Predictions
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Mining stocks moved higher on Friday, and you might be wondering if this was anything more than a daily breather – so let’s start today’s analysis with the GDXJ ETF.
In short, so far, we haven’t seen a good indication that the rally is anything more than a normal daily rebound. Even the very sharp declining, red, dashed resistance line remains unbroken.
Consequently, the trend remains down.
Now, the bigger of the orange rectangles that you see on the above chart just ended, which means that, based on the time analogy to the April-May decline, we might see a bigger corrective upswing shortly. However, it’s not very likely that this is going to be the case. The reason is that this time the decline was visibly smaller than it was before, and thus the GDXJ is not as severely oversold.
Additionally, there are good reasons (like the situation in the USD Index) to think that the precious metals sector is about to move much lower instead of rallying. I covered many of them in Friday’s flagship Gold & Silver Trading Alert.
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Recapping Last week
Gold prices saw the high for last week registered in Monday's session, here doing so with the tag of the 1842.80 figure. From there, a sharp decline was seen into late week, with the metal dropping all the way down to a Friday low of 1783.40 - before bouncing off the same into the daily/weekly close.
Gold Market, Short-Term
For the very short-term, the downward phase of the 10-day cycle is still deemed to be in force, with the same now at 13 trading days along from its last labeled low, with this wave shown again on the chart below:
As mentioned last weekend, the next smaller-degree bottom is expected to come from this same 10-day wave. In terms of price, any reversal back above the 1815.10 figure (August, 2022 contract) - if seen at any point - would be our best indication of a turn higher with the same, thus making this a key level heading into the new week.
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Gold Price Forecast FAQ
How do you forecast the price of gold?
Predicting gold prices can be said to be both a science and an art. For example, analysis of gold supply and demand is scientific and completely objective whereas aspects of technical and sentiment analysis of the current gold market can be more of an art as it relies on the skills and perspective of the gold analyst.
Generally speaking, when the focus of the gold forecast is longer term then analysis of the fundamentals, ie scientific analysis, comes to the fore.
For shorter-term predictions of gold prices, the price of gold in the coming weeks and perhaps few months, technical analysis of past and current gold prices, market trends, as well as current market sentiment can be more actionable predictors. Here, the fundamentals can still play a role but generally serve more as background details.
What are the key factors for long term gold forecasts?
When forecasting what may happen to the price of gold longer term, there are many things to consider including economic trends, the impact of current and expected monetary policy, QE, debt monetization, and the aggregate impact on future currency valuation.
Does the price of gold go up when the stock market goes down?
The price of gold is often negatively correlated to the stock markets. When the markets go down, gold prices usually go up. However, this is not always true. Sometimes the price of gold and stocks both go up and down in unison. Fundamental factors play an important role and need to be carefully analyzed. Historically, however, the price of gold is not tied to the fluctuations of stock and bonds. This is one of the chief reasons when one should have gold in their portfolio – to protect the long-term value of your investments.
Does the value of the US dollar predict the price of gold?
As gold is traditionally quoted in US dollars, the price of gold is negatively correlated to the strength of the USD. The weaker the US dollar, the cheaper it is to purchase gold. Therefore, if economic factors predict a strengthening of the US dollar then this will tend to drop the price of gold, and vice-versa. According to the statistics (since 1973), the long-term correlation between the U.S. dollar index and the gold prices is -0.6 so this link is quite strong.
How do US interest rates impact future gold prices?
The level of US interest rates is an important driver of future gold prices. When investing in gold, the investor is faced with the opportunity cost of gold - a non-interest bearing asset. The higher the US interest rate for holding US dollars or investing in Treasuries, the higher the opportunity cost of holding gold. It is more likely, therefore, that a rally in the price of gold will be forecasted the lower the US benchmark interest rate.