The gold market is going through rough waters. Even though we stick to our longer term gold forecast 2021 we believe that gold will first feel the pain, then the gain. The next few months will be continue to be rough for gold, especially as it continues to find heavy resistance at former all time highs. Our forecast is that gold will be bullish late(r) in 2021.
The gold market is simply in a longer term consolidation. This is not good or bad, this is just flat … and it may establish solid foundations for a bullish period late(r) in 2021.
We see that gold fell outside of its 2020 rising pattern around mid-November. Since then it tried and worked hard to get back into an uptrend. It worked, for the first 4 days of 2021 … after which the big sell off came (Friday, January 8th).
The gold chart has this sideways trading range now since September of last year. Gold has not moved for more than 3 consecutive trading days above former all time highs.
Note that a flat gold market is now confirmed by a strengthening Dollar. As you can see on the next chart the Dollar is back, and is about to create havoc with markets. Once above 91 points we see the Dollar move to the 92.5 – 93.0 area which is not an end-of-the-world scenario for markets but will certainly provide headwinds to the gold market!
For now we don’t see opportunities in the gold market. We will continue to monitor the gold market until we believe the consolidation turns into a bullish-reversal.
