Gold Price Forecast relative to
Long Term Monthly (LT-M) – Medium Term Weekly (MT-W) – Short Term Daily (ST-D) – and Hourly (not shown) data.

GOLD FORECAST

(Previous week in brackets)

Gold/USD live price

09 October:: 2% Dollar weakness pushed all asset classes up by similar expected percentage points during the 2nd half of the week. With Daily showing a solid upmove in all tools, it could push weekly risk into turning up again and bullish divergence position versus Monthly. If that happens the subsequent rally could be quick. Against a quick rally is a developing temporary bearish divergence within the hourly timeframe. The risk combination of time frames and the currently higher close again above the 2011 highs is likely to limit any downside reaction. No Change.

02 October:: Bulish divergence between daily and Long term timeframes pushed the market up above 1900 and closing around that handle. Technically Gold looks a little under the weather, but we still have not seen a bearish divergence Risk to Price that would call for a possible longer term correction unfolding after the 5 year broader advance from that dec 2015 low at 1086. So, we will wait for that divergence to manifest which will be months away at the earliest. Gold/USD Quarterly Risk to price show the following picture with the 1st quarterly all time high close since Sep 30 2012 at 1776.

Quarterly gold price and risk weight 30 Sept 2020
The current high risk level appears to develop a similar pattern as the 2002-2006 period. Prices do not necessarily react to very overbought risk levels and more to divergences versus other relevant time frames.

No Change to asset allocation

Gold/Euro live price

09 October:: Gold vs Euro shows a very similar pattern as against USD. A strong hold.

02 October:: Gold still looks more vulnerable against Euro, but the expected technical picture after 5 years of unfinished business is for a strong bearish divergence after a very strong price rally. That hasn’t happened yet. The Eur/USD exchange rate fluctuation will continue to blur the gold trend analysis somewhat and we look to follow the Gold/USD price as ‘the’ leading indicator until the status of World reserve currency takes a different corner.

Gold/British Pound live price

09 October:: Gold/GBP looks technically well supported. No change.

02 October:: A very similar story for Gold/GBP as for EUR. As our GBP/EUR exchange rate guidance is still bearish in this high volatility environment Gold/GBP should also remain a core holding for Sterling based investors.