The US stock market is showing increasing volatility on lower optimism for good earnings growth. Gold is continuing to gain momentum as the 20 and 50 day moving averages turn positive. A golden crossover of the 50 and 200 day could be only a week or two away. Its been a rough four years for junior mining investors as the Venture hits 2008 and 2002 lows. However, there could be a good chance from both a technical and fundamental standpoint that the correction cycle in precious metals is coming to a conclusion.
Tag: gold outlook
The price of gold closed on Friday, January 16 at approximately $1,276. My model indicates that price is still too low by about 16% and therefore the probability is that the price of gold will rally substantially in the next several years.
For the week commencing January 19th, there is are some key economic data releases on the agenda which are not very likely to cause significant volatility in gold and silver prices. However, all focus this week is on the European central bank who will announce two things. First, an interest rate decision is scheduled. Second, a monetary stimulus package could be announced, some sort of bond buying program. All eyes are on the ECB President on Thursday who is likely to cause volatility in stock markets, currency markets and precious metals.
The most important arguments for the bearish predictions are rising interest rates, weaker oil prices, a strong U.S. Dollar. The strong demand out of Asia is expected to put have a limited impact. Meantime, what is the chart telling us? As explained in this gold chart analysis, gold is heading towards $1340 an ounce in the short run.
I have no idea how the Greek elections will affect gold, but I do think any signals we need will show up on the price chart. Yes, turn off the TV and turn on the chart. Note that the long-term trend is down because gold hit a new low in early November. This means the bounce from 1140 to 1240 is a counter-trend move and the break below 1180 is bearish until proven otherwise. Gold has yet to continue lower as prices firmed the last two weeks, but I would like to see a break above 1220 to negate this bearish signal and consider a bullish alternative.
We provide in this article a comprehensive overview of different forecasts and predictions for the price gold in 2015. We hasten to say that our own stance regarding predictions remains unchanged. We have written several times before that “forecasting isn’t about predicting the market; it’s about marketing the prediction”. We also believe there is a “prediction addiction”. That is why we are not taking specific price predictions too serious. We believe, however, there is value in forecasting. A forecast is not about predicting prices but rather describing a future situation, mostly based on ongoing trends. In this article, we have selected 6 bullish gold forecasts and predictions for gold in 2015, and 9 neutral to bearish stances towards gold in 2015.
The dollar’s strength is helping to push commodity prices down, as many commodities are priced in dollars, including gold and oil, which in turn doesn’t help the efforts of the European Central Bank and the Bank of Japan to boost inflation in their countries. As more people become aware of what is really going on, they will accumulate physical gold and silver, and the prices will have to adjust to the real fundamentals and will no longer be determined by a handful of speculators. So, I expect to see prices trend higher in the New Year.
Are Russia and Europe buying more gold? Will the Swiss vote ‘yes’ in its gold referendum? Is there a chance for QE4? Peter Schiff is on Kitco News to comment on some of the most recent headlines surrounding the gold market and also to share his thoughts on the U.S. economy. The Euro Pacific CEO says the U.S. recovery isn’t real and adds that the dollar is only strong because all other currencies are weak.
In his weekly market review, Frank Holmes of the USFunds.com summarizes this week’s strengths, weaknesses, opportunities and threats in the gold market for gold investors. Gold closed the week at $1,230.39 down $7.93 per ounce (-0.64%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, fell 1.31%. The U.S. Trade-Weighted Dollar Index rebounded 0.71% for the week.
Investment bank Sterne Agee expect the gold price in 2015 to average $1,400. For the year after, in 2016, the bank’s analysts believe the gold price will trade at $1,450 on average. Silver should follow gold higher. The analysts expect a silver price of $19 in 2015 and $21 in 2016.
Gold is approaching a critical price point, i.e. $1,180. That is the lowest price of the last years. It has been tested twice, so this third retest is a crucial one for the short and medium term. Although the sentiment is extremely negative, there are some indications which could provide some help for the yellow metal.
In a recent presentation, Dundee’s Martin Murenbeeld explained the bullish and bearish forces at work in the gold market with some 50 charts. The slideshow is available in this article. On the last slide, Dundee provides price targets. More importantly, however, Murenbeeld looks into the gold price expectations for 2014 and 2015.
Although today’s Fed announcement didn’t really change anything, the financial markets continued to anticipate higher U.S. rates. The first chart shows the 5-Year Treasury Note Yield climbing close to its yearly high. The 10-Year T-Note yield also bounced. The widening spread between U.S. and foreign yields continues to support the dollar. The second chart shows the Dollar Index hitting a new recovery high. That pushed most commodity prices lower. The orange bars in the second chart shows the Gold Trust falling to a new low.
Why should we expect that gold will rally? The answer, in my opinion, can be found in my gold pricing model that has accurately replicated AVERAGE gold prices after the noise of politics, news, high frequency trading, and day to day “management” have been removed by smoothing.