Gold Outlook (Look Out)

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Greetings from our nation’s capital, where I’ll be ambling around the rural countryside for the next couple of days. Even so, Slope’s duties beckon, so I’ll continue to nurse things along even during my wanderings.

Gold has, as we all know, been a complete dog since the middle of 2011, having lost about 40% of its value. As 2016 began, it looked like gold was ready to reward the bulls again (just as equity bears were all-too-briefly rewarded), but in both cases, things fell to pieces. Looking at gold’s front month below, it illustrates the metal’s continued weakness since July of this year.

1201-gc

I put the arrow at that gap in particular, since I think another important stairstep lower has been put in place. That gap, I fear, will not be filled.

Looking at the longer view, I suspect gold will remain weak until it tags the red trendline at approximately the place I’ve put the arrow. At that point, it has a chance to rally, but no higher than the aforementioned gap. If and when all of that happens, I further suspect gold will simply re-weaken and perhaps even crack back down into the triple digits again (although I doubt it will get that bad).

1201-gld

Suffice it to say that the prospects for precious metals (and, even moreso, their miners) look grim for 2017.