Gold Forecast – Breakout Above $2000 After the June Cycle Low

I penned an article in late September proclaiming a potential bottom in gold as interest rates peaked. Shortly thereafter, precious metals established a base, and prices have been trending higher. Below is the chart from that article highlighting last year’s bottom. Note- we still have a long way to go before the next 4-year cycle peak in 2024.

Contrary Indicator

A key factor bolstering my belief that gold was nearing a major bottom last year was the proclamation on the front page of the Wall Street Journal’s business and finance section, stating, “Gold Loses Status as Haven.” This headline printed on September 20, 2022, and was a beautifully timed contrarian indicator!

What’s Next?

It’s my belief once Gold Finally Breaks Above $2000, it May Never Look Back, just as we saw in 2005 after prices broke above $450. We could get some consolidation over the coming weeks, with a possible low in June, but overall, we suspect prices will challenge $2800 to $3000 in 2024 and perhaps as high as $10,000 by the end of this decade.

Current Outlook

After Wednesday’s Fed decision, gold spiked to an intraday high of $2085.40. The next intermediate cycle low (blue arrows) is due around mid-June, so prices may consolidate or correct for a few weeks. In my view, the odds for a sustained breakout above $2000 are much greater after the June low, but prices could surprise with an early breakout.

Inflate or Die

In the past 100 years, the U.S. federal debt has expanded from around $400 billion to over $30 trillion and is projected to hit $50 trillion before the end of this decade. To put this in perspective, if you spent $100 every second of every day, it would take 317 years to distribute $1 trillion.

Considering the unmanageable levels of debt, deficits, and mounting unfunded liabilities, it’s natural to question the eventual outcome. There are only three ways out: reduce spending, default, or resort to inflation. As the authorities control the money supply, the most plausible approach is inflation. As fiat money dies, there will be a race to precious metals – are you prepared?

AG Thorson is a registered CMT and an expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more charts and regular updates, please visit here.