The gold price in 2017 has taken a dramatic fall recently.
Since the beginning of March, gold prices are down 4.3% to $1,200. In fact, the metal has declined every single day this month for eight consecutive sessions.
But frankly, it should not come as a surprise. At least, not if you’ve been following me in this space.
After all, I’ve been talking about how the gold price had likely moved into overbought territory and that it was ripe for a correction.
Liquidity moves markets!Click here to learn how you can follow the money.
And the combination of a pending interest rate hike and a rallying dollar have teamed up to send the price of gold into this sell-off.
By now, you know the Fed is all but certain to raise rates next week. Actually, I’ve been impressed with gold’s resilience in the face of the expected rate hike and stronger dollar.
My sense is, given the depth of this sell-off, we’ve likely seen the worst. There could be a little downside left, but I don’t think much.
Once the Fed confirms its rate hike, I think gold will return to rally mode. I’ve adjusted my gold price targets to reflect the latest movements, and I’ll share those with you today.
First, let’s take a look at what exactly happened to gold this week…
Why the Price of Gold Has Fallen 2.8% This Week
After closing at $1,234 on Friday, March 3, the gold price opened lower on Monday as the U.S. dollar began to rally. The metal ended the day 0.7% lower at $1,225.
On Tuesday, March 14, gold prices continued to decline. They opened at $1,222 and worked their way lower to close at $1,216 for a 0.5% loss.
Wednesday saw another rally in the dollar, which took the U.S. Dollar Index (DXY) from 101.75 to 102.2. That naturally incentivized gold traders to sell gold, dragging the gold price 0.7% lower to $1,208 on the day.
This chart shows just how the dollar has trended this past week:
Even the DXY’s backtracking on Thursday was not enough to attract gold buyers. The price of gold fell 0.4% to settle at $1,202.
As of 9:45 a.m., the gold price today (Friday, March 10) is down 0.2% to $1,200. That puts it on track for a weekly loss of 2.8%.
Although gold’s losing streak has scared many investors into selling, I still maintain that the long-term picture is much more bullish.
Here’s my gold price forecast for the rest of the year…
My High Targets for the Gold Price in 2017
After peaking near its 200-day moving average, as I had forecast, gold’s been correcting. My target was around the $1,215 to $1,220 level, which has clearly been taken out.
I do think that the selling pressure may have exhausted itself and that sufficient gold buying could come in to support the psychologically significant $1,200 level…
That price has acted as support and resistance a few times over the past year. It’s possible we could test maybe another $20 lower, but if that happens, I’d expect it to be just a short-term drawback.
At this point, I’d keep a close eye on next week’s action surrounding the Fed’s likely rate hike on Wednesday. If we see gold prices begin to climb after that, then my view is we’ll have seen the end of this correction.
From there, I’d expect to see a quick run up to $1,220 and then to $1,240. By mid-year, I expect the price of gold to hit the $1,265 mark. Beyond that, look for $1,400 as the target for later this year.
About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.
Disclaimer: © 2017 Money Morning and Money Map Press. All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning. 16 W. Madison St. Baltimore, MD, 21201.
The post Gold Price in 2017 Will Rebound from Current 8-Day Losing Streak appeared first on Money Morning – We Make Investing Profitable.
Wall Street Examiner Disclaimer:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am also a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases promotional consideration is paid on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.