Precious Metals: This Chart Shows What’s Likely Next for Gold Prices

GoldThis Could Send Gold Prices Skyrocketing

You should be watching gold prices very closely for the next few weeks. There are few technical developments that suggest upside moves in precious metals in short-term are very likely.

You see, when it comes to technical analysis, it is said that trend is your friend, until it’s broken. In other words, don’t go against the trend. And once it turns; you should be looking to change your perspective.

With this said, please look at the daily chart of gold prices below, and pay very close attention to the circled areas.

Gold Price Chart


Chart courtesy of

Since mid-January, gold prices were in a definitive down trend. Gold prices were making lower highs and lower lows (this is marked by the red circles.). In late July and early August, we saw some consolidation in the precious metal prices and then it started to trend higher. This is why I’m upping my gold price forecast for 2016.

In early October, gold prices broke above the trend that was in place since January.

Looking at the pace of gold prices moving from their lows in August to now is critical, too. At the very core, it shows the extent of the bullishness. Between January of this year and early August, gold prices declined roughly 10%.  Between August and now, gold prices have pretty much wiped off the losses incurred. Losses accumulated in eight months, recovered in roughly three months.

Long-Term Trend: Gold Price Outlook Remains Bullish

While looking at the short-term trend is important, and it gives an idea about where gold prices could go a few weeks from now; long-term trends are very critical as well.

Looking at the long-term chart, I see bullish sentiment building up in gold prices. Please look at the chart of daily gold prices since the bull-market in the yellow metal began in 2002.

Gold - Spot Price Chart

Chart courtesy of

Between 2002 and mid-2013, gold prices were holding the long-term trend. Then, the trend broke. At that point, one would expect the yellow metal prices to drop further.

Notice the two lines on the chart above? Gold price didn’t really drop. And, if you look closely, the trend in gold prices is slowly flattening. Consider that between 2011 and 2013, gold prices fluctuated roughly 30%. Between 2014 and now, gold prices have fluctuated just 20%.

Put in simple words; volatility in the gold market is losing strength. This is a great sign for those who are bullish on the yellow metal. It also says sellers are losing strength and aren’t able to drive the price lower.

Gold Price Outlook for 2016

With short-term bullish sentiment building up, for the rest of 2015 I expect gold prices to end on a positive note.

Going into 2016, if you look at gold price forecasts from major investment houses, they expect gold prices to close between $1,050 and $1,150. I am very bullish. It will not be surprising to see gold prices continue to trend higher. These forecasts we currently see can turn out to be outright pessimistic.

With all this, I am keeping my eyes on gold mining stocks. I see there’s value there, and many companies are trading for pennies on the dollar.

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