A year ago we published our 2019 gold price target which was 1550 USD. That was at a time when the precious metals market was invisible to investors. There was no interest whatsoever in gold or silver. Today, after a few bullish months, the precious metals market is heating up, and investors keep on asking us whether it is not too late to enter. Obviously, the potential gains continue to decrease with each passing week, and many will find themselves entering gold too late. On the other hand silver looks like it has still much more upside potential. Silver is also eyeing our projected silver price target for 2019 which has more upside than gold at this point in time.
So the key question is whether InvestingHaven’s research team believes that $1550 gold is the ultimate target for 2019. Or is there more upside potential?
One of the two leading indicators for gold suggests there is more upside potential. That’s the TIP ETF.
As said in Will Gold Benefit From The Giant Breakout Of Inflation Expectations In 2019 there is a very strong correlation between TIP and the gold price.
We see continued upward pressure in inflation expectations, reflected in the price of TIP ETF. Especially this week with the Fed cutting rates for the first time after 11 years it is clear that there is downside in rates, hence upside in inflation expectations. This is good for gold!
The second leading indicator for gold is reflected in the futures market positioning.
This indicator looks less promising. We see extended, close to extreme, positions which implies the upside potential is drying up.
We closely look for extreme positions in both the net positions of commercials as well as open interest. Both are now entering extreme areas.
This does not tell anything about the timing of gold’s peak, it just tells that the upside potential is limited in this phase of the bullish market trend.
We continue to believe that gold will rise to approx. 1550 USD. In doing so silver will accelerate its upward move close to 20 USD (or right below). Our forecast First Majestic Silver On Its Way To Double In 2019 will materialize, although it already has risen close to 50% so the upside potential is only 25% to 30% now.