Gold Forecast – GameStop, Gold, and Miners Update
The speculation in stocks is reaching extremes. As I write, GameStop ($333.88) is up 1640% in January.
The Fed announces their decision at 2:00 PM – no change is expected.
Gold remains stuck in consolidation. Prices could dip a little further, which we would use as a buying opportunity to allocate the remaining cash reserves in our educational metal’s portfolio.
The speculation in today’s market is unbelievable. Massive liquidity and risk taking millennials seem to be the driving force behind the various bubbles. They stampede from one hot-stock to the next, looking to get rich. Currently, they have their sights on GameStop (GME).
GameStop (GME) is up another 90%+ after yesterday’s 92% gain. Prices are now up 1640% in January! Short sellers are getting bloodied, making them have to buy at ever-higher prices. This is nothing more than a high-risk game of musical chairs – when the music stops (bubble bursts), several investors will find themselves without a chair.
It is Fed day – no change is expected to interest rates. Gold could go either direction after their announcement. The initial reaction is sometimes misleading, and frequently prices reverse a day or two later.
GOLD 4-HOUR CHART: Gold needs a sustained rally above $1875 or a decline below $1800 for near-term direction. If gold drops, I will add the remaining cash reverses from the educational portfolio if the GCI reaches a max bullish reading of zero. Currently, that would require a breakdown below $1780.
-GDX- Miners gapped lower and are below the $34.50 level. If prices finish well-below $34.50, then GDX could decline to retest long-term support around $31.00. A bullish reversal that closes decisively above $34.50 today would be near-term positive.
Overall, we are very bullish on precious metals long-term and have a minimum target of $8500 by 2028.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. He posts daily updates to Premium Members. For more information, please visit here.
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This article was originally posted on FX Empire
