Gold Price Forecast: Are Gold Miners Signaling a Potential Breakout

Gold miners are surging over persistently high inflation data. Perhaps investors are beginning to question the transitory inflation claims of the Fed. A sustained breakout in gold miners could signal a major bottom in precious metals, in our opinion.

GDX Daily Chart

Technically, miners are back above the critical breakdown level of $31.00, supporting the potential for a bullish undercut low or bear trap. A sustained breakout back above the 200-day MA could signal the beginning of the next leg higher.

GDX Long Term

The weekly chart of GDX illustrates the significance of the $31.00 price level. It took GDX seven years (2013 to 2020) to breakout above $31.00. After the post-Covid spike, prices extended too far too fast and have been correcting. Recently, GDX broke below $31.00, but that breakdown was fleeting (possibly a bear trap). Prices have since recaptured the $31.00 support level, and I see the potential for a significant bottom if prices maintain $31.00.

Barrick Gold

One factor supporting the potential for a significant bottom is the 3-year cycle in Barrick. It seems every third September (2012, 2015, 2018, 2021?), Barrick reverses the recent price trend. In this case, prices may have formed a significant bottom in September 2021.

Gold Futures Daily

The intermediate gold cycle bottomed in early August. A breakout above the 12-month downtrend line could signal the next leg higher in precious metals. Until gold futures clear $1900 to $1925, precious metals remain vulnerable to more sideways consolidation.

Our long-term stance remains firmly bullish on the yellow metal and believes gold will reach $7,500 to $10,000 in USD terms by the end of this decade.

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. For regular updates, please visit here.