What a fall for Gold! That was a drop of around $100 in a matter of 4 weeks, after touching a high of 1362 in Sep 2017. The good thing is Gold has reversed its bearishness at 1263 which was the exact level at which it broke out above its long term trend line earlier in July 2017.
Currently Gold appears to have turned bullish on the daily and weekly charts. With the stock market at an all time high, greed index at extremes and VIX at its lowest range despite a host of uncertainties and geopolitical risks plaguing the markets, Gold and Silver are expected to gain further strength from here as reality dawns and market participants start chasing safe havens. Of course there are going to be seasonal swings within the overall bullish trend so one can trade Gold both ways using short term charts. For the long term enthusiasts, here are two critical things to note –
(a) Gold will be LT bullish as long as it stays above the 1255/60 levels. Below that it will become MT bearish. A break below 1200 however, may make it LT bearish and if that happens, I won’t be surprised if pundits start calling for 1000 again.
(b) Gold’s major LT trend move was when it dropped from 1910 to 1050 (Year 2011 – 2015). The first attempt at retracement ended at 38.2% FIB in 2016. The recent attempt in Sep ended just short of the same 38.2% level. I would expect the next attempt to target the 50% FIB retracement level at 1480 (see charts below)
Gold – Futures chart with new targets (long term)
Gold – FIB retracement for the long term move
I have also attempted a simple forecast with major levels that we are targeting for Gold between now and mid 2018. As I said before, there will be a lot of short term swing moves within the overall trend but in the chart, I have only plotted some important levels that I expect will be tested over the next 10 months. Happy trading!
Gold Forecast (Oct 2017 to Jun/Jul 2018)
The link to the earlier article on Gold is here