Gold Price Forecast – Major Breakdown or Buying Opportunity

I am beginning to see investors panic and turn bearish on gold as prices slip below $1750. That tells me we could be approaching a selling climax and an important low. The big picture chart of gold remains decisively bullish and points to higher prices for years to come.

GOLD BIG PICTURE UPDATE

GOLD MONTHLY TREND CHART: I like to turn to the monthly gold chart for a big picture perspective. Looking at the top indicator, you will see this is the first Monthly Stochastics dip below 80 in a new bull market. We had a similar setup in 2003 when gold dropped to $320, which turned out to be a superb buying opportunity. I believe the same is true now.

The 20-Month Average (pink line above): In bull markets, gold prices should hold above the rising 20-month average (currently $1700). The only exception is when prices dip into an 8-year low (like 2008). Note- The next 8-year low is not due until 2024.

GOLD PRICES AFTER SEPTEMBER 2001: After the initial shock of the 911 attack, gold prices fell back to pre-9/11 levels ($270) a few months later. That turned out to be one heck of an opportunity. I see the same setup now as gold approaches pre-Covid levels.

GOLD NOW: I believe we could be close to a bottom in gold. Prices could spike lower over the coming days if the stock market sells off, but I think that would be temporary. If we look back 5-years from now, I believe we will consider today’s prices an amazing long-term opportunity.

In summary, Covid-19 was a pivotal turning point across the globe. There is a lot more money in circulation but the same amount of gold. Just like there was a brief opportunity to buy gold at pre-911 prices a few months after the event, investors are receiving a similar chance in gold now, in my opinion.

I believe now is the time to be greedy when others are fearful.

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 here.

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