According to AG Thorson, Technical Analysis Expert & Editor, GoldPredict, who think, gold prices could explode higher, and soon! He said, we see the potential for a strong breakout in gold in the coming weeks.
The next time prices break above $2000 – they may never look back. Once gold clears $2100 it will be drawn to $3000 like a magnet.
In the row of gold price forecast, the overview said, gold is on the launch pad, waiting for a catalyst to send prices soaring. Two potential candidates are the UAW strike or the Fed going on permanent pause. A breakout in September or October is plausible.
Looking at the gold big picture, gold consolidated in a tight range for nine months before it launched through the $500 level back in 2005 (never to return). I believe prices are on the launch pad once again, and an explosive breakout is imminent. The exact timing is tricky, but if we use nine months as a guide, we could see new all-time highs by December or January, followed by a jaw-dropping rally towards $3,000 in 2024.
On the daily chart of gold, I’m watching this falling wedge pattern. We had the same setup in 2019 before the breakout. The current pattern seems complete, and a decisive rally (with good volume) above the $1980 level would signal a bullish breakout.
The Fed will announce its next rate hike decision on September 20th: no hike is expected. All eyes will then turn to the November 1st meeting, which currently has 35% odds for a rate hike. If they stay on pause in November, that could be the catalyst to send gold higher. If they hike in November, gold may have to wait until January for a breakout.
I think the Fed may be done tightening because they finally got the Fed funds rate above inflation. When they first started hiking on March 17, 2022, fed funds were at 0.25% to 5.0%, and CPI was 8.5% (-8.00%). Now, fed funds are 5.25% to 5.50%, and CPI is 3.7% (+1.50%). With fed funds 150 basis points above CPI, Powell is sufficiently restrictive and can stop hiking.
Looking at Financial Shenanigans, companies are very creative when it comes to reporting earnings. With a few tweaks to their balance sheet and depreciation schedule, they can make returns look better than they are. For an accurate picture, I compare earnings per share (EPS) to NIPA (National Income and Product Accounts) profits, which uses “income from current production.”
Whenever S&P 500 EPS/NIPA Profits rise above 20%, that tells you companies are using a lot of tricks to inflate earnings, which only happens before a recession. This measure has exceeded 40% on four occasions: 1974, 2008, 2020 and 2023. The bottom line is corporate earnings are overinflated to extremes, and the next thing that usually happens – is the bottom falls out. He also deliberated the related factors- including inflation too!
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