Gold Price Forecast – Caution is Warranted
QUICK COT UPDATE: Commercials hedgers added 12,728 shorts last week for a total net-short position of -318,339 contracts. Down from the September high (-337,741) but still very elevated. That, combined with an aging cycle, suggests gold is facing a significant headwind as we head into October.
We find cycles help identify significant turning points in precious metals. The XAU mining index (chart below) has been running a 42/46 day alternating cycle. The previous cycle bottomed 36-trading days ago. A 1-2 week bounce from here would support a secondary peak during the first week of October followed by an intermediate decline into late November or early December.
Gold may be setting up a bull trap for investors as prices test or marginally break the $1566.20 high in the coming days. Our median-term forecast calls for an eventual breakdown below $1490 and a potential backtest of the breakout area surrounding $1380.
Longer-term we believe gold recently confirmed a new bull market and the next intermediate low may become one of the last great buying opportunities.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit https://goldpredict.com/
This article was originally posted on FX Empire
