Best of the Week
Most Popular
1.North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - Nadeem_Walayat
2.Researchers Find $10 Billion Hidden Treasure In A Dead Volcano - OilPrice_Com
3.Gold and Silver : The Battle for Control - Rambus_Chartology
4.Asda Sales Collapse and Profits Crash! UK Retailer Sector Crisis 2017 - Nadeem_Walayat
5.Deep State Conspiracy or Chaos - James_Quinn
6.The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - Plunger
7.Gold Stocks Coiled Spring - Zeal_LLC
8.Neil Howe: The Amazon-Walmart Rivalry Will Determine the Future of Retail - John_Mauldin
9.Crude Oil Price Precious Metals Link in August - Nadia_Simmons
10.Gold and Silver Precious Metals Nearing Breakout - Jordan_Roy_Byrne
Last 7 days
The Stock Market No Longer Cares About Trump - 21st Aug 17
The Coming Boom Of Productivity Will Get Our Economy Back On Track - 21st Aug 17
Buffett Sees Stock Market Crash Coming? His Cash Speaks Louder Than Words - 21st Aug 17
This Could Be The Biggest Gold Discovery In History - 21st Aug 17
Stock Market Correction in Full Swing - 21st Aug 17
Seeking Confirmations – US Stock Market - 21st Aug 17
The changing demographic of online gamblers - 21st Aug 17
Gold is a coiled spring… the breakout is here, fundamentals are in place, technicals are compelling - 20th Aug 17
A Midsummer Night's Dream: Buy Gold and Silver - 20th Aug 17
Gold Mining Stocks 2017 Fundamentals - 20th Aug 17
EIA Weekly Report and Crude Oil - 19th Aug 17
4 Insights for Adjusting Your Portfolio in a Rate-hike Environment - 19th Aug 17
Gold Direction Indicator - 19th Aug 17
Historical Inevitability and Gold and Silver Ownership - 19th Aug 17
You Are Being Lied To About “Low” Gold Demand - 19th Aug 17
This is Why Cocoa's Crash Was a Perfect Setup - 19th Aug 17
Gold, Silver Consolidate On Last Weeks Gains, Palladium Surges 36% YTD To 16 Year High - 19th Aug 17
North Korea Is Far From Being Irrational… It Has A Plan - 18th Aug 17
US Civil War - FUNCTIONAL ILLITERATES TRYING TO ERASE HISTORY - 18th Aug 17
Bitcoin Hits New All-Time High Over $4,400 As It Catches Paypal In Total Market Cap - 17th Aug 17
3 Psychological Ingredients behind Great Web Content - 17th Aug 17
The War on Cash - Rogoff, Orwell and Kafka - 17th Aug 17
The Stock Market Guns of August, Trade Set-Up & Removing your Rose Tinted Glasses - 16th Aug 17
Stocks, Bonds, Interest Rates, and Serbia, Camp Kotok 2017 - 16th Aug 17
U.S. Stock Market: Sunrise ... Sunset - 16th Aug 17
The Next Tech Crash Could Delay Your Retirement by a Decade - 15th Aug 17
Gold and Silver Precious Metals Nearing Breakout - 15th Aug 17
North Korea Showdown: Pivotal Market Turning Point - 15th Aug 17
Tech Stocks DOT COM Bubble Do-Over? - 14th Aug 17
Deep State Conspiracy or Chaos - 14th Aug 17
From the Trans-Atlantic Axis and the Trans-Asian Axis - 14th Aug 17
Stock Market Intermediate Correction Underway - 14th Aug 17
The Islamic State Jihadi Pivot to Asia - 13th Aug 17
Potential Pivots Upcoming for Stocks and Gold - 13th Aug 17
North Korean Chinese Proxy vs US Military Empire Trending Towards Nuclear War! - 12th Aug 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

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.


© 2005-2017 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