Gold Price Forecast: Gold Confirms A Double Bottom as Crypto Collapses
The comments below are an edited and abridged synopsis of an article by A. G. Thorson
Gold confirmed a bullish breakout after last Thursday’s inflation report. After months of disappointment, gold bugs can breathe a sigh of relief.
The core inflation rate fell to 6.3% in October, below the 6.5% estimate. However, it remains high and above the Fed’s 2% target. Nevertheless, markets soared on the news, inferring that the Fed could take a softer approach with rate hikes.
With inflation showing signs of peaking, it’s expected the Fed will eventually pause its rate hiking campaign. Precious metals have been waiting for this moment. Gold soared on the news and confirmed a breakout.
The big picture in gold supports a crucial bottom in 2022, similar to what we saw in 2018. Expect prices to work their way higher over the next several months. Sometime next year, there should be a sustained breakout above $2,000, followed by a strong rally into the 2024 peak. Target wise, Thorson still likes $3,000 (+/- $200).
While the big-picture outlook for gold mimics the 2018 low, the intermediate-term trend echoes the double bottom of 2021. With a confirmed breakout, expect gold to work its way back above the 200-day MA in the coming days/weeks. Expect occasional pullbacks, while the overall trend moves higher. Thorson sees a breakout above $2,000 in the second half of 2023.
In conclusion: With inflation peaking, the Fed waning and crypto imploding, gold appears to have bottomed. We can look forward to a strong advance in precious metals in 2023 and 2024. As well, watch silver and platinum closely.