Two Reasons Why Gold Has Plenty Of Upside Potential In 2019

In our gold price forecast 2019 we identified three leading indicators for the gold market. Out of the three we see a strong supportive effect from two of them. This supports our thesis of mildly rising gold prices in 2019. Consequently, we see that our 3 top gold stocks for 2019 will break out at a certain point.

This is what we said in our original forecast which we published 5 months ago:

We believe that gold, in this formation, will go back up in 2019 to test the $1300 to $1375 area. As that will be the 3d attempt for gold to break out of its strong resistance there is a fair chance gold will succeed. That’s why our most bullish gold price forecast for 2019 is that gold will hit $1550 in 2019 (20% probability), but only if it succeeds breaking through the $1375. The $1375 test is a base case scenario (75% probability).

So far the price chart of gold looks perfectly on track to break above $1300, and to move fast to $1375 where it will meet crucial resistance. If once above $1375 we expect an easy ride to $1550. Note that these findings are in line with the 20 year gold chart as well as 40 year gold chart.

 One of the relevant principles from our 100 investing tips for long term investors we have to apply is that capital flows between asset classes. This will result in temporary market cycles. That’s the result of ‘intermarket dynamics’. These cycles typically last between 6 and 18 months. The key is to identify those market cycles, and understand that they are subject to change.

How does this tip relate to our gold price forecast? If and once gold breaks above $1375 we know for sure that capital flows between asset classes have caused a new bull market in gold assets, which is why it is imperative to have the top gold stocks high on anyone’s watchlist.

By the way forget about gold news, the insights made above are the ones that really matter for gold investors, and any investor for that matter.

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