The Fed’s interest rate hike has ended. According to market analyst AG Thorson, gold is poised to hit an all-time high. Metals and miners are likely to pull back briefly as the dollar recovers towards January. The odds still favor a recession starting in 2024, likely in the second quarter. The analyst takes a picture of the market and plots gold’s possible next path.
Permanent Fed pause and market outlook
cryptokoin.comAs you follow from , the Federal Reserve left interest rates constant at its last meeting. More importantly, it confirmed that the interest rate hike campaign is over. The next logical step would be interest rate cuts. According to the latest dot plot, the Fed is likely to make three rate cuts next year. Accordingly, expectations are that the Fed will reduce interest rates to 4.60% by the end of 2024.
Here is a great chart from Hussman Strategic Advisors: “The chart below shows previous instances when the S&P 500 was at least 7% above its 40-week average and at least 4.5% above its 10-week average as it is now.
Stupid Money Confidence and Leading Economic Indicators
Individual traders are at it again. Stupid Money Confidence rose to the 3rd highest value in the last 25 years. Very high Confidence usually precedes modest gains at best until sentiment resets.
LEIs have fallen for 20 months, the longest losing streak since 2009. The longest negative streak without a recession lasted ten months in January 2008. Then the Great Recession began. I find it hard to believe that we will avoid a recession and that LEIs will return to normal before the economy breaks.
The big picture for gold price
After 12 years of consolidation, the gold train left the station in 2005. Thus, it rose to previously unthinkable heights in a breathtaking bull run that lasted 6 years. Today, gold is in almost the same setup. Therefore, a break above $2,100 will confirm that the gold train has left the station once again. The first stop will likely be around $3,250, then $4,750, and finally around $9,450 in late 2029 and early 2030. These are predictions based on the previous bull run.
Meanwhile, as the bull market ends, I expect a parabolic breakout top. This happens when gold prices double in just a month or two. It would also be my signal to start selling aggressively.
The opinions and predictions in the article belong to the analyst and are definitely not investment advice. We strongly recommend that you do your own research before investing.
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