Latest Gold Price Forecast & Predictions
Period | 2 Days | 3 Days | 1 Week | 2 Weeks | 1 Month |
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Change | -0.35% | -0.35% | +0.06% | -1.09% | -3.75% |
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Since my last article posted back in early-May (i.e., 'Gold Cycles Move into Mid-Term Topping Range'), Gold has moved sharply lower, with the metal dropping over $150 - into the most recent swing low.
For the mid-term picture, the Gold cycles are deemed to be pointing south, though we are at or near the point at which a smaller-degree rally should soon take hold.
Gold Timing Index
As mentioned in past articles, the path for the mid-term picture called for higher highs into the late-April to mid-May timeframe, before setting up the next key peak for Gold - which was expected to come from the combination of 72 and 310-day cycles.
Back in early-May, I mentioned a key (sell) signal had occurred, coming from our Gold Timing Index - which is shown on the chart below:
From my 5/8/23 article: "our Gold Timing Index has formed a sizeable divergence from price action - which is something we would expect to see at mid-term peaks with Gold - such as with our 310-day cycle; at minimum, this will normally signal a top with our smaller 72-day component. Going further, a divergence between price and our Gold Timing Index - along with a diverging 72-day detrend (which is also being seen) - will see the lower blue cycle band indicator acting as the minimum magnet on the next correction, with that band currently at the 1961 figure - well below current price levels."
With our Gold Timing Index giving a sell signal back on 5/3/23 - ...
In a recent interview, renowned investor Stanley Druckenmiller explained why he sees the potential for a financial crisis centered around 2030. His timing perfectly aligns with ITR economics prediction for the next great depression. Below are some highlights from his May keynote speech as USC.
The Rise of Entitlements
Fiscal spending on older adults has grown dramatically since the 1960s. Nealy 40% of all taxes are spent on seniors, and that trend is just starting. In 25 years, it will hit 70%.
Today, the U.S. spends 600% more on social security and entitlements than they do on children. The current $31 trillion in U.S. debt doesn't include future spending. If you incorporate unfunded liabilities - it's over $200 trillion.
Demographics
The birth rate in the U.S. peaked in 1957 at 3.7 and has fallen to 1.64 as of 2020. Because seniors are living much longer, we have an inverted pyramid where far more receive benefits than pay. We are just now entering the consequences of the baby boom generation.
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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.