Best of the Week
Most Popular
1.The Brexit War! EU Fearing Collapse Set to Stoke Scottish Independence Proxy War - Nadeem_Walayat
2.London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - Nadeem_Walayat
3.The BrExit War, Game Theory Strategy for What UK Should Do to Win - Nadeem_Walayat
4.Goldman Sachs Backing A Copper Boom In 2017 - OilPrice_Com
5.Trump to Fire 50 US Cruise Missiles To Erase Syrian Chemical Attack Air Base, China Next? - Nadeem_Walayat
6.US Stock Market Consolidation Time - Rambus_Chartology
7.Stock Market Investors Stupid is as Stupid Goes - James_Quinn
8.Gold in Fed Interest Rate Hike Cycles- Zeal_LLC
9.The BrExit War - Britain Intelligence Super Power Covert War With the EU - Nadeem_Walayat
10.Marc Faber: Euro to Strengthen, Dollar to Weaken, Gold and Emerging Markets to Outperform - MoneyMetals
Last 7 days
Earth Overshoot Day - Human Population Growth - 28th Apr 17
Misunderstanding GDXJ: Why It’s Actually Great News For Junior Miners - 28th Apr 17
What Makes Bitcoin Casinos So Remarkable? - 28th Apr 17
Financial Markets Improvised Explosives - 27th Apr 17
More Stock Market Short-Term Uncertainty As Stocks Get Close To Record High - 27th Apr 17
Elliott Wave Theory: Is Elliott’s Theory Enough? - 27th Apr 17
Billionaire Investor Paul Tudor Jones Says Stock Market Valuation Is “Terrifying” And He Is Right - 26th Apr 17
The Great BrExit Divides - Britain, USA and France - 26th Apr 17
10 Facts That Show Our Taxes Are Worse Than You Thought - 26th Apr 17
What Trump’s Next 100 Days Will Look Like - 26th Apr 17
G20: SURPASSING THE 2nd GLOBAL STEEL CRISIS - 26th Apr 17
What A War With North Korea Would Look Like - 25th Apr 17
Pensions Are On The Way Out But Retirement Funds Are Not Working Either - 25th Apr 17
Frank Holmes : Gold Could Hit $1,500 in 2017 Amid Imbalances & Weak Supply - 25th Apr 17
3 Reasons Why “Spring Forward, Fall Back” Also Applies To Gold - 25th Apr 17
SPX may be Aiming at the Cycle Top Resistance - 25th Apr 17
Walmart Stock Extending Higher - Elliott Wave Trend Forecast - 25th Apr 17
Google Panics and KILLS YouTube to Appease Mainstream Media and Corporate Advertisers - 25th Apr 17
Gold Price Is 1% Shy of Ripping Higher - 25th Apr 17
Exchange-Traded Funds Make Decisions Easy - 25th Apr 17
Trump Is Among The Institutionally Weakest National Leaders In The World - 25th Apr 17
3 Maps That Explain the Geopolitics of Nuclear Weapons - 25th Apr 17
Risk on Stock Market French Election Euphoria - 24th Apr 17
Fear Campaign Against Americans Continues Nuclear Attack Drills in New York City - 24th Apr 17
Is the Stock Market Bounce Over? - 24th Apr 17
This Could Be One Of the Biggest Winners Of The Electric Car Boom - 24th Apr 17
Le Pen Shifts Political Landscape- The Rise of New French Gaullism  - 24th Apr 17
IMF Says Austerity Is Over - Surplus or Stimulus - 24th Apr 17
EURUSD at a Critical Point in Wave Structure - 23rd Apr 17
Stock Market Grand Super Cycle Overview While SPX Correction Continues - 23rd Apr 17
Robert Prechter Talks About Elliott Waves and His New Book - 23rd Apr 17
Le Pen, Melenchon French Election Stock, Bond and Euro Markets Crash - 22nd Apr 17
Why You Are Not An Investor - 22nd Apr 17
Gold Price Upleg Momentum Building - 22nd Apr 17
Why Now Gold and Silver Precious Metals? - 22nd Apr 17
4 Maps That Signal Central Asia Is at Risk of War - 22nd Apr 17
5 Key Steps For A Comfortable Retirement From Former Wall Street Trader - 22nd Apr 17
Can Marine Le Pen Win? French Presidential Election Forecast 2017 - 21st Apr 17
Why Stock Market Investors May Soon Be In For A Rude Awakening - 21st Apr 17
Median US Household’s Wealth Has Declined by 40% Since 2007 - 21st Apr 17
Silver, Platinum and Palladium as Investments – Research Shows Diversification Benefit - 21st Apr 17
U.S. Stock Market and Gold, Post Tomahawks and MOAB - 21st Apr 17
An In Depth Look at the Precious Metals Complex - 20th Apr 17
The Real Story of China’s Strong First-Quarter Growth - 20th Apr 17
3 Types Of Life-Changing Crisis That Make You Wish You Had Some Gold - 20th Apr 17
The Truth is a Dangerous Thing - 20th Apr 17
2 Choke Points That Threaten Oil Trade Between Persian Gulf And East Asia - 20th Apr 17

Market Oracle FREE Newsletter

Why 95% of Traders Fail

The Future Price Of Gold Will Drop Below $1000 In 2017

Commodities / Gold and Silver 2016 Nov 12, 2016 - 05:40 PM GMT

By: InvestingHaven

Commodities

As the price of gold and silver came down sharply, many investors are asking what the future price of gold will be. Although we do not pretend to have a crystal ball, we observe sufficient signals in the charts to make a make a call about the future price of gold into 2017.

In general, the precious metals market has turned very sour. Gold registered it largest loss on a weekly basis since it crashed in 2013. Moreover, gold and silver miners, said to lead the precious metals complex, have truly crashed this week.


Still, mainstream media, which we consider a barometer for sentiment, remains very moderate. That should be considered a bearish sign. These are some of the headlines of today, as gold lost more than 5 percent in two days, silver almost 15 percent in two days and precious metals miners even more than 15 percent:

The only analysis that is truly bearish appeared on Seeking Alpha the future price of gold was forecasted to drop below $1000. Though that article was not written by ourselves, we come to the same conclusion when analyzing price behavior and sentiment. And it surely confirms our proper gold price forecast for 2017.

Future price of gold points to $1000/oz as the most likely 2017 forecast

The gold chart sent a clear signal this week. As seen on the first chart, gold dropped below the important $1250 level. The price of gold clearly returns in the same bearish trend channel which started with the big collapse of April/June of 2013.

With that, we get the ultimate confirmation that gold is still in a longer term bear market, and that it is moving to the lower area of the channel which is below $1,000 /oz.

Generally speaking, the challenge understanding gold is that it has two faces. On the one hand, it is an inflationary asset, rising as inflation expectations rise. On the other hand, it is a fear asset, rising when fear enters the market.

Throughout the first 6 months of 2016, markes were driven by fear, which is the reason why gold was rising. However, at a certain point, fear stopped acting as a primary trend, and gold stopped rising. Even if there is some inflation, gold seems to act as a fear asset at this point, and investors should respect that signal.

The Yen confirms gold’s price behavior

The Japanese Yen is said to be a global risk indicator, similar to gold. In recent weeks, the Yen has been falling steadily, after it rose sharply throughout 2015. What can we derive from that? The difficulty is that the weekly 5-year chart does not express any relevant pattern. In such a case, investors should zoom out until a relevant pattern becomes visible.

When zooming out, we observe an extremely interesting and important fact: the Yen stopped rising exactly at major resistance, at the red line on the chart below. It appears that 100 points in the Yen index has a very high importance. The fact that the Yen got so much resistance at that level confirms our conclusion from the gold market.

Warning: High Yield bonds

Though the Yen and the price of gold both confirm that the future gold price has a very bearish bias, there is one risk indicator which is not ‘convinced’ at this point, i.e. High Yield bonds (symbol HYG). The next chart makes that point. Investors should pay close attention at which point HYG stops falling.

Conclusion

We would not exclude that gold would retest its 1980 highs at $850, though we do not expect gold to trade for a long time at that price level (it is more of a worst case scenario). We explained in much more detail how we came to that conclusion in past articles, but, today, we got additional confirmation about the validity of that scenario from intermarket dynamics (first and foremost with a falling Yen after it hit secular resistance). The High Yield bond market should be watched closely though for the reasons outlined above.

http://investinghaven.com

Analyst Team
The team has +15 years of experience in global markets. Their methodology is unique and effective, yet easy to understand; it is based on chart analysis combined with intermarket / fundamental / sentiment analysis. The work of the team appeared on major financial outlets like FinancialSense, SeekingAlpha, MarketWatch, ...

Copyright © 2016 Investing Haven - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife