The spot gold price today (Friday) is up slightly, 0.23%, after falling steadily throughout the month of November.
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Gold prices started the month of November above the $1,300 line but have since fallen to an intraday low of $1,160 yesterday.
While sentiment is getting pretty low, it’s tough to say if we’ve reached a bottom yet.
Some analysts expect gold could retest its $1,050 low of December 2015, while others think it’s close to a bottom right now.
There are some indicators, however, that are pointing to a possible bottom in gold stocks. If that turns out to be the case, then we could also have an early sign of a near-term bottom in gold itself.
Notably, some of the best forecasters in the markets, and for gold in particular, see higher gold prices in the not-too-distant future.
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Here’s a look at how the spot gold price today is trending, along with where I see it heading next…
How the Spot Gold Price Today Is Trending
The spot gold price closed at $1,184 in the shortened trading session on Black Friday.
But late on Sunday evening in overnight trading, gold popped to $1,195, which coincided with temporary U.S. dollar weakness.
By Monday’s open, as the U.S. Dollar Index (DXY) regained some strength, gold opened at $1,188 then rose modestly to close at $1,194. Tuesday brought similar volatility, with gold dropping in early morning trading to open at $1,185. It then rebounded again to close at $1,188.
But Wednesday is when the hammer hit, with gold prices trending downward all day. They opened at $1,182 and succumbed to selling pressure into the NY close at $1,173.
Thursday offered only a bit of encouragement, as gold opened at $1,171, hit an intraday low of $1,162, then recuperated to close at $1,172. The spot gold price today is up modestly to $1,174 in morning trading.
Now that we’ve talked about how gold prices have been trending, here’s what I expect…
What’s Next for Gold Prices as We Head Toward 2017
Just three weeks ago, pre-election, gold had traded above $1,315. At its recent low of $1,160, gold had given up nearly 12%.
In recent weeks, I’ve outlined to you how I thought gold was essentially collateral damage as investors and traders alike were chasing a number of sectors as stocks and the dollar were making new highs.
But one measure of sentiment for gold mining equities, the Gold Miners Bullish Percent Index (BPGDM), has just pointed to a possible bottom in gold stocks. When the BPGDM trades above 80, it’s overbought, and when it trades below 20, it’s oversold.
Well, just recently the index traded down near seven, then rallied above 10. Around seven is considered very oversold, so the rise above 10 suggests we may have seen a bottom for gold stocks.
What’s more, the SPDR Gold Shares ETF (NYSE: GLD) has seen $2 billion of gold outflows in November, one of the worst months in the past three years. So this, too, points to a possible bottom thanks to negative sentiment towards gold.
On the other hand, one of the best gold forecasters is Swiss Banking group UBS.
In its recent report it said, “A few weeks ago, we set our three-month forecast for gold at $1,300; while the recent pressure on the market makes this target look ambitious, we continue to expect gold to make its way back towards this level in the months ahead as the rationale for holding gold from a strategic standpoint remains intact, in our view.”
Meanwhile, “Bond King” Jeffrey Gundlach, whose DoubleLine Capital manages over $100 billion, said “the dollar is going to go down, yields have peaked and will move sideways, stocks have peaked as well, and gold is going to go up in the short term.”
I think we may continue to see some continued pressure as we approach the Dec. 14 FOMC meeting, when a rate hike is expected. If history rhymes, that could mark a turning point for the current correction. Around this same time last year, gold bottomed out at $1,050. What followed was a rally for the record books.
Another rate hike could spark a rally into the New Year. And while it still seems like a long shot from here, I also think $1,300 is still possible within the next few months.
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