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A Gold Price Forecast For 2017

This gold price forecast analysis was written on October 3d last year, and was updated in December and in April 2017.

In the meantime InvestingHaven published a gold price forecast 2018.

Gold was hot in the first 6 months of this year. Hardly anyone predicted the monster rally we saw in 2016. And, as it always goes, right at a time that everyone got overly excited, gold prices stalled and did go nowhere since then. Consequently, around summer time, there was a consensus around a bullish gold price forecast for 2017.

The excitement around the summer of this year was striking, as suggested by the non-stop bullish media coverage. We highlight a couple of the articles that appeared right at a time when the price of gold was in the process of peaking:

As always, we prefer to stick to the facts which we derive from chart developments as well as sentiment analysis and intermarket dynamics. We see a concerning trend developing on the gold chart. The green circles on below chart highlight the rare periods of price stabilization. Gold is a volatile asset, so it does not happen often that prices stabilize. In December of 2015, the price of gold stabilized which was an indicator that a reversal was brewing. Right now, we see the same happening. Both happened right a major support and resistance. If you are interested in short-term gold trading, read the following analysis for some perspective and unexpected tips.

How to determine a gold price forecast for 2017

Price analysis suggest that the gold price forecast for 2017 is bearish.

Our expectation is much closer to what this article said in May I See Gold Correction In 2017. Hence, it is not as bullish as the articles highlighted above.

Where do we see the price of gold going in 2017? We start sensing that gold will continue to as a “fear asset” in 2017. Given that stock markets, which we consider an important risk indicator, are becoming very bullish, as suggested in” S&P 500 Suggests Much Higher Prices Coming in 2016 and 2017″, gold could take a hit as fear is moving away from markets. In the early days of 2016, markets were driven by fear, which is the reason gold rallied so strongly, but that has changed recently.

With that in mind, we see gold moving towards the lower area of its bearish trend channel. Right now, support comes in around 990 USD. By the second half of 2017, that will be around 890 USD, which is exactly the peak of 1980.

In other words, we do not exclude the scenario in which the gold price will hit 890 USD in 2017 after which it will turn around and evolve into a new and strong bull market.

New update on our 2017 gold price forecast

*** Update end December *** 

After the U.S. Fed’s decision to increase interest rates, we updated our readers on gold’s trend. Basically, the reaction of the market on the Fed’s decision is only accelerating gold’s sell off, and confirming our gold price forecast. The chart most actual gold chart below to shows how gold fell into its former falling trend channel in October). It seems sufficiently clear that gold is now moving to the lower area of that channel, which is below $1000. In other words, today’s sell off in gold simply confirms the ongoing down trend in the 5-year bear market.

Moreover, as said before, we believe gold is the leading indicator in the precious metals complex. Gold is nowhere near an important support level at this point. We add gold’s long term price chart with annotations we haven’t shared before. It’s the first time we reveal this gold chart which we consider the most important one in our long chart list. We show the falling trend channels on this chart, visible in both bear markets after the 1980 peak. Gold tends to move in clear and concise channels during a bear market. Although the center of a channel can potentially provide support, it is much more likely that the lower area of the channel will be the key support area.

This long term chart shows the first support target below $1000 and the second around $850.

*** Update end of April 2017 *** 

After our December update, gold bounced back and went higher with the upper area of the falling channel. However, that rally did not reach too high, as gold’s rally stalled at $1300 at the end of April. That is truly bearish, similar to last summer, as gold did manage to come closer to the highest resistance trend line of its secular bear market. It implies that our bearish gold price forecast for 2017 is likely to materialize later this year.

A closer look on the weekly chart, over 5 years, makes our point. Watch how the latest rally stalled more than $50 below the highest trend line. Gold bulls want to see a break above that trend line in order for gold to turn its bear market into a bull market.

If $1200 does not hold, chances are high that gold will fall to $1050 during the summer, and, worst case, to $900 before making a final bottom.

Our gold price forecast for 2017 remains valid until proven otherwise.

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  • I call these kind of articles “attention seeking” at best. Lowest gold was of late $1050 in December 2015. Impossible to go lower since cost of extraction, refinement and marketing costs approximately (and historically) $1100 an ounce and rising due to cost increases due to normal factors associated with mining. Any lower and it causes mines to slow production and store metal thus artificially keeping the price up regardless of how much paper is dumped to suppress the price and keep the DOW propped up. Even at $1050 we saw high premiums for physical as dealers couldn’t get stock. This 300-1 paper fraud with no way to deliver physical metal needs to stop. The only way gold can go to $890 is if the issuing banks keep dumping fraudulent paper gold contracts onto the market. The only way to put this paper gold fraud to bed is for purchasers of the contracts to ask for delivery. This would mean issuing banks would need to dip into the physical market or repurchase contracts at a negotiated loss. But, we’ll see. Any price lower than $1000 an ounce I say buy it all…

    • Investor101

      James this guy’s forecast is on track to get materialized. Seems much more than an attention seeking article. I would categorize this analysis under razor sharp or very accurate.

      • jimbo

        Do you have a crystal ball or something?

        • Sheriff

          Shall i buy ounces now or wait more ? ( i’m asking those who beleive in this article )

          • Sheriff

            I sell my onces when the author said that the gold price will decrease and it did but now its increasing so…?

    • Starbucks Coffee

      No it is not impossible to grow lower. January of 2016 was wave A. August 2 is Wave B, We are on a Wave C decline which will retrace at least to the January 2016 low if not to the 890-850 new low. As long as you are above January 2016 low, you will definitely be safe shorting it with absolute certainty. Sell as many January 20 GDX $22 naked calls as as your broker will let you to get easy free money and use that to buy January 20 GDX $18.50 puts with the premium you made. You will not have to use any of your money this way and you can do it all with OPM.

      • Wong Wong

        Totally bullshit!!

    • itoldyouso7

      You might be wrong James? Just take a look at the oil shale business cycle. The miners are no different than the shale oil producers. The cost to extract the commodity can be more than what the market is willing to pay, especially if we have an over supply of it. Which we do. People are digging, panning and finding nuggets all across the world. Gold is NOT as rare as everybody seems to believe it is. Copper in my opinion is more useful and valuable than gold. I think Warren Buffett is spot on about his views on investing in gold. Just my two cents. GL

    • TN

      You are Spot On!. The so called Highly Qualified Fund Managers & their Group try to make use of Derivative Instruments to Manipulate and bring Down/Up the prices . Sometimes they are successful and some times the Banks go Bankrupt because of the Gamble. There is too much scope for Gamblers rather than for real Investors. If they try to bring down to $890 Levels, some Financial Institutions/Banks will Go Bust.

  • eric

    you have your dates all wrong…. (you should be talking about December 2015, not 2016…

    • Rodney Moore

      Yep. And he is in denial, as well. This article probably nails it.

  • Rodney Moore

    Gold rises and falls and it most likely is going to dive. It happens. This article nails it.
    Gold will most likely do just like the article says. Generally, when you search for gold and silver price predictions it is always Up! Up! Up! as the people that sell bullion want you to buy. Too many biased articles and fancy manipulated charts.
    Smart people will wait to buy when it is one penny under a thousand per ounce. And then it’ll shoot right back in value.
    Low gold prices mean good times and public optimism. People should wish for that, but there is too much greed.

  • Nemesis Brouze

    There is at least one date in the 2017 calendar that is going to affect the gold price….. March 31, when the UK trigger Article 50 to invoke Brexit. If no details are forthcoming for analyst to chew on and make a determination, then there will be a similar reaction in the markets to the actual brexit referendum itself i.e.
    The pound will fall in value sharply, the markets will wobble and the price of gold will rise again.

  • Sep a

    Against the usd gold will get hammered against all other major currencies it will appreciate. However given the state of EU banks the sterling looks like it will be a winner this year (brexit was the smartest thing Britain could have done, they left a massive collateralized debt obligation we call the EU) . Also if sterling falls dollar rises. Soooo

    let me run you through the state of the world… I was going to keep this short but I feel there are a lot of people who understand only one variable in a multi variable function. Gold is a store of value and moves based on the world’s ability to buy goods. If it’s easy to buy stuff, gold falls if it’s hard to buy stuff it rises … pretty simple. Now for our multi variable function…. as of the recession of ’08 many countries/companies especially EM countries, loaded up on interest rate swaps , ( sweet deal at the time , dollar was low, rates were extremely low , and the outlook for the USD was garbage) fast forward , these instruments .. the majority of which are payable in USD are under water , and no longer a good deal for those holding them , Waiting longer as their countries lower interest rates to support exports in a falling commodity market exacerbates the spread in losses that need to be financed. So to close them out (which requires USD, drives up the USD, again hammering gold in terms of the dollar, now another company or country that holds these swaps that wasn’t under water will be under water , rinse and repeat… as this happens commodities which are denominated in USD and in USD only will get more and more expensive , driving down the price of them because less can be bought dollar for(insert currency here) … summary contagion… this will continue. Combine that with EU banking crisis risk and demand for dollars surges, ,couple that with a high demand in USD assets since every other country in the world is shitting on their currency and there is a flight to safety to preserve their value, this is why you have seen a boom in property prices (and non dollar denominated gold ).. until something gives , be it war, massive inflation globally ( trade agreements anyone?? Lol) or the redefinition of capital… but until a basket of goods represents purchasing power of the global economy gold will get creamed relative to the dollar. Theeeen once all the gold bugs are shaken out this year , gold along with every other commodity will run up in one of the longest commodity bull markets ever … I don’t ever really comment on any blogs because sharing your brain takes some premium out of your trades , however hearing a lot of under-educated commentary and feel bad for the owner of the blog . So long term , yeah , gold and all commodities will go high and then higher.. ohh did I mention USD raising rates in march as well? … lol as for the fraudulent gold contracts .. yes notional massively outweighs physical… but it does so in every commodity on the planet … yeah one day golds number will be called.. then gold will go past 10k … if u have a long investment horizon park it and go . If not then read the above over and over

    • michael cutugno

      How long you talking about for a plan I want to put around 800000 ausie dollars into gold I’m 30 and would like to retire at 50 is that the sort of time frames you talking about to invest on gold or on a ten year scale.

  • Dick Fitswell

    I’m putting all of my money in camel semen futures.

  • doowleb

    Did this global markets expert predict the 2008 crash? No? Strange that.
    Calling for lower gold prices is no surprise from any ‘investment’ guru. They make zero money on the stuff. Can’t have investment dollars flowing anywhere without commissions available.

  • Interesting to note: Very often when gold rises in other time zones, there is a sharp drop at the opening hour in New York. What are your conclusions?

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