Gold Charts That Support Our Forecast
The power of the pattern.
Chart patterns have a lot of predictive information provided they have a reliable setup. A reliable pattern has a reliable outcome until proven otherwise.
If we look at the daily gold chart we can very clearly see a reliable reversal setup right below 2011 ATH. The grey box depicts the reversal we are referring to. Thats the viewpoint on the price axis of the chart.
On the timing axis of the chart we see that gold is about to complete this nice reversal at the end of this year. In other words it took gold the entire year 2021 to complete a reversal.
Pretty powerful combination. It certainly justifies much higher gold prices to come in the not too distant future. The chart pattern justifies our $2,500 gold price forecast for 2022.
The weekly chart puts the 12 month reversal below ATH into perspective. It comes after a 9 year reversal on the gold chart.
The combination of the daily and weekly chart patterns clearly make the point of much higher gold prices underway, its a matter of WHEN not IF.
If we take an even bigger picture view with the monthly gold chart we see how this 12 month reversal after a 9 year reversal both come after a huge 9 year uptrend.
We add the quarterly gold chart to the mix and we only get more confirmation of an orderly setup.
Yes, we strongly believe that our bullish gold forecast for 2021 is simply delayed with one year. Its postponed to 2022. And this makes our 2022 gold forecast even more bullish than the one of 2021.
Golds Leading Indicator #: Inflation
Gold shines in an inflationary environment.
The inflation indicator of Martin Pring consists of energy and miners. So in a way it makes sense that it goes up in tandem with gold. Not the best inflation indicator, but more of a secondary one.
We like the monetary inflation indicator much more as thats essentially what gold is: currency. Gold rises when there is monetary inflation.
Below is the monetary inflation on the same chart as the gold price .
Visibly, gold is tracking the monetary rise. And the money in the system has exploded with Corona induced stimulus by policy makers.
This one chart shows how the gold price perfectly tracks the M2 monetary growth. Gold has been lagging M2 in 2021. And this confirms the very first chart of this gold forecast: a bullish reversal that took 12 months to complete, and with this chart setup it is also a reversal below the M2 vs. gold gap.
The True Cause Of Inflation Right Now
The cause is a barrage of production-killing regulations. If the government wanted industry to produce less, to make goods scarcer, to drive up the cost of living and force down the standard of livingthen it could not have devised a more effective plan. And it gets away with it all the more easily, because people blame the Fed and the purchasing power of the dollar.
The purchasing power of the dollar makes a perfect scapegoat. If this is the root cause, then what does every voter, wage earner, and retiree on fixed income do? He blames greedy corporations, greedy bosses, and greedy COLA committees for not giving him a raise. He thinks this is a grand conspiracy by which the rich get richer, at his expense.
The socialist revolutionary sees the misplaced anger, and grins dryly, good, good.
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Precious Metals Price Forecast For 2022
With inflation worries growing stronger over the past months, precious metals, especially gold, have been reflecting investors’ sentiment about inflation quite well.
As investors initially supported the Feds transitory inflation mantra, the gold price ended up staying rather flat over the last few months.
But as fears grew stronger, and with inflation hitting a new 30-year high in October, gold, silver, and platinum prices soared, responding to surging consumer prices and deteriorating investor sentiment.
To see if this upward trend is likely to continue in 2022, read Nickys price estimates for each precious metal below.
Gold Predictions For Future
Because gold is such a mature and well established market, and a rather settled and slow moving one, there are a lot of predictions that are made into the future for the precious metal. Of course, there are factors that need to be considered for long term gold price forecasts that are often unpredictable, such as the mining supply, or geo-political tensions. But, there are also a lot of factors that help drive gold, and these have been mostly driving the price up slowly over the years, such as currency inflation and the need for safe haven assets.
The digital gold narrative has also been eating into golds market cap. Still, the trend is up given how bullish the asset is. Gold is starting to make a comeback as Bitcoin cools off and the delta COVID variety begins to shake up markets again.
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Golds Leading Indicator #: Euro
Gold tends to go up when the Euro is in a bullish mindset. Consequently, when the USD is rising it puts pressure on gold.
The long term Euro chart suggests that the Euro is hitting support. The 110 level in the Euro index better holds. IF, and thats a big IF, the Euro turns higher in 2022 AND respects 110 it will be supportive of higher gold prices in 2022. Our 2022 gold price forecast will get a confidence vote from the Euro.
Similarly, the USD is really bullish right before 2022 kicks in. Thats why we believe that gold cant accelerate yet, it needs the USD to complete its bullish move and turn flat or lower. Thats when gold will break out from its 2011 ATH and accelerate its bull run.
The next chart shows the periods in time in which the otherwise positively correlated Euro and gold were diverging. It has been only a few times in 2 decades. The Euro is our #1 leading indicator for gold. The Euro cannot fall in order for gold to start and accelerate its bull run, thats the conclusion.
Factors Most Likely To Influence Silver Prices
While there are a number of variables that can impact the silver price, lets look at those most likely to play out this year and beyond and determine if theyre likely to push the price higher or lower
Industrial Demand
Roughly half of all silver goes toward a variety of industrial applications . Demand from industrial users usually doesnt fluctuate all that much, but the next four years is likely to see a substantial increase due to Bidens green policies.
Thats because silver is a key component in many green technologies. Since it is most the most conductive of the metals, it is vital to making green technologies what they are. Check out just how much silver demand will grow under Biden in this article.
If industrial demand grows as I expect, the silver price is likely to increase…
RESULT: HIGHER SILVER PRICE
Investment Demand
The factor that has the biggest impact on the silver price at any time is not industrial demand or jewelry demand. It is investment demand. Heres the evidence
This chart, going back to 1960, demonstrates the link between investment demand and prices. The red shaded areas show that selling from investors led to lower or weak price, while the green shaded areas show that rising demand from investors led to rising prices.
The key to this chart is that when investment demand shifts from net selling to net buying, the price has risen . As such
- As investment demand goes, so goes the silver price.
So are investors buying or selling silver?
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What Makes Gold Prices To Fluctuate
Gold prices show the real state of a country’s economic health. When the prices for gold go up, it signals an unhealthy economy. This is because investors tend to buy more gold, to protect their wealth from an economic crisis or inflation. And as demand increases, so does the price. On the other hand, when the prices are low, the economy is in perfect health. This makes real estate, bonds, and stocks more profitable investments. Hence the demand for gold is low. The key takeaways are that gold prices reflect the thoughts and beliefs of commodity traders. For example, if the general perception of the economy is poor, they will buy more gold. If investors think that the economy is great, they buy less.
Golds Leading Indicator #: Bond Yields
Bond yields are inversely correlated to gold. They are not as strong a leading indicator as the Euro. Gold can rise when bond yields are flat or range bound.
The weekly bond yields chart is now in a narrow range. Any fast move higher will push gold back. A slow rise or range bound setup can support rising gold prices.
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Factors That May Affect The Price Of Gold
Typically, traders associate fundamental analysis with the stock market, not gold. While fundamental stock market analysts monitor certain companies’ financial statements, gold market analysts monitor macroeconomic factors, political and economic world stability, and competition from investment alternatives to forecast prices. Let’s look into five macroeconomic parameters that can influence the cost of the main precious metal.
Gold Price Forecast For 2022 And Beyond: A Buy Hold Or Sell
Gold price forecast for 2022 and beyond: A buy, hold or sell? Photo: Shutterstock
The gold price retreated from a mid-November spike to end the month slightly lower. It has picked up after a further drop at the start of December.
A stronger US dollar offset higher inflation expectations and stable interest rates, preventing the precious metal from holding onto the gains. The market continues to observe the impact of the Covid-19 pandemic on the global economy and gold demand, as well as central bank policy on tapering monetary stimulus and raising interest rates.
Whats the outlook for the gold price in 2022? Should you consider taking a long or short position?
In this article, we look at some analysts latest gold price projections.
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Central Planning Of Ports And Transportation Causes Inflation
Did we mention that government central planning of ports and transportation infrastructure has restricted capacity, and interfered with efficiency in many other ways? For example, slowing the adoption of new technologies in the ports. The net result is that the government has added many useless ingredients to shipping and logistics, the cost of which is included in many of the things we buy at retail.
Anti-pipeline policy has limited the flow of oil from Canada. Too many ships waiting offshore LA has meant they are drifting or attempting to anchor outside the limited number of anchor slots. One such attempt severed an oil pipeline. This will not only further reduce the flow of energy to where it is needed, but probably serve the anti-energy demagogues and politicians with a ready-made excuse to ban the next pipeline that comes up for permitting.
Gold Price Change History
Gold has been used as the currency of choice throughout history, with the earliest known use being during 600 B.C. in Lydia .
Fast forward to 1848, gold was identified at Sutter’s Ranch, and this inspired the famous Gold Rush to California. A few years later in 1861, Salmon Chase, the U.S. Treasury Secretary at the time produced the original U.S. paper currency backed by gold.
And this was the start of the gold standard, which later came to an end in 1933.
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My 2021 Gold Price Prediction
My forecast for the gold price in 2021 is based on the current environment of negative real yields, a weak dollar, rising inflation expectations, and ongoing monetary and fiscal stimulus. We also have to consider the Feds diminishing ability to respond effectively to crisistheir toolbox is indeed getting low.
As a result, I expect the gold price to be higher in 2021. Here are my predictions.
The most important message from this analysis is that even if Im wrong, it has rarely been more important to own gold. That means any dips in price should be bought, especially for those that dont hold a meaningful amount.
- Remember, though, gold is less about the price, and more about its value, meaning what it will buy you.
There are many factors that could impact the gold price, of course, in both the short and long term. To learn more about investing in gold and silver and what might be ahead, especially for fiat currencies, download Mike Maloney’s best-selling book for free, Guide to Investing in Gold & Silver.
How Can Savers Protect Against Inflation
Fortunately for savers, all is not lost if prices spike higher. Treasury Inflation Protected Securities are US Treasury bonds that are indexed to the consumer price index. If CPI goes up, the principal of that bond increases if CPI falls, the principal decreases. While experts say TIPS are expensiveoffering little yield by historical standardssavers can use them to hedge their investments if they are worried about near-term increases in consumer prices.
And while hedging against inflation is tricky, finding assets whose returns outpace rising prices may be more doable. Data compiled by Dimensional Fund Advisors suggest a wide range of assetsincluding bonds, stocks, and commoditieshave produced returns that exceeded inflation when held for longer timeframes.
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Gold Weekly Price Forecast As Of 20122021
After the price reached the first downside target at 1760 for sell trades entered in the zone of 1802 1782, the price started correction up in the medium-term downtrend. The correction likely target will be the test of the trend key resistance 1834 1827. After the price reaches the key resistance, it will be relevant to enter new sell trades with a target ta 1760.
While the gold price is rising, one could buy in the correction with the first target in 1834 1827. I recommend considering long trades when the correction reaches 50% of the impulse that occurred last week, that is level 1783. The first buy target will be at level 1815.
$3000 $5000 Per Ounce
Accurately predicting the future price of gold is on the same level of mastering alchemy in my opinion many have tried and as far as we know, no one has been successful. However, there are plenty of ways to gauge potential swings and trends, borrowing any major geopolitical blowup , unforeseen economic turn, etc. With that said, based on how the US and global economies are fairing and future market indicators combined with the fact that no nation in the history of nations has survived debt levels the US and other nations have achieved with our fiat currencies. I feel I am safe, and being conservative in saying that gold should be trading between $3000 $5000 per ounce in ten years. Should the US dollar fail and/or the US dollar loses the coveted global reserve currency status and/or even the loss of the petrodollar, gold could hit these level far sooner. It’s a troubling time for the dollar that is only going to get worse I don’t think there has been any better time to own physical gold, if for no other reason than for financial insurance.
Brian Whitfield, President/CEO, Pacific Coin Exchange
freenever
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Whats The Bottom Line
According to Nickys forecast, it looks like all four precious metals could have a good chance to shine in 2022.
Most likely, gold might well profit and get a boost as a safe-haven asset by ever-growing inflation fears, investor risk sentiment as well as geopolitical risks. The silver price, on its part, might benefit from the ongoing transition to cleaner energy, with silver being a vital element in green energy technologies.
Platinum and palladium, as rare metals used by carmakers to reduce harmful vehicle emissions, are likely to profit from recovering car demand and stricter emission regulations, among other factors.
In any case, considering the last two years weve had, itll be interesting to see how 2022 unfolds. But in the meantime, with a still-unclear global economic situation and persisting inflation fears, investors could probably think of protecting their wealth with a safe-haven asset.
Driver #: Climate Action
- Nicky sees large transition risks associated with decarbonizing the world . These arise if governments pursue tougher climate policies forcing the economy to restructure and for capital to move away from dirty towards cleaner sectors.
- But the commitment to ESG , energy transition etc. is an overall cost-push and underpins structural higher inflation*.
*Structural inflation is the type of inflation that results from changes in the structure of demand and supply.
The commitment of some countries to shift to cleaner energy sources could push up inflation as the price of some energy sources will go up.
But, on the other hand, this transition to green energy could benefit precious metals such as silver, which has unique qualities vital for the production of solar cells used in the production of electricity.
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Silver Price Predictions Projections & 5
Jeff Clark, Senior Analyst, GoldSilver.com
What will the silver price do in 2021? And where is it headed over the next 5 years?
Ive compiled silver price predictions from a number of precious metals analysts and consultancies. I also make my own prediction, based on the key factors that in my experience are most likely to influence the silver price both this year and the next five years.
This will be fun, so lets jump in!
We Predict 2022 To Have One Or Two Bullish Cycles For Gold Which Might Push The Gold Price To $2500
We consider our annual gold price forecast one of those important forecasts because of our track record in forecasting gold prices. It is clear that both gold and silver started a new bull market back in 2019. One important dynamic in bull markets is that it starts slowly and picks up speed over time. While the gold bull market is already for +2 years in progress we believe there is more upside potential. We predict golds price could rise to $2,500 area in 2022. Our 2022 forecast is strongly bullish but we need the USD to first run its course before gold can accelerate. We believe gold will accelerate mid-2022.
InvestingHavens research team publishes for many years in a row its annual market forecasts. These gold and silver forecasts have been read by millions of investors over the years.
Our 2022 gold price forecast comes at a very interesting time. At the time of writing the USD being one of the leading indicators for the price of gold has been dominating precious metals prices. It did suppress them throughout most of 2021, more than at any point in time in recent years. Lately, however, the USD has been rising together with precious metals.
In other words, if anything gold price predictions might become among the most challenging ones. So far, our track record between 2016 and 2020 was phenomenally accurate. We will be open minded and transparent with our premium members and readers as it relates to our performance, now and at any point in 2022.
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