Predictive Modelling Suggests New Gold Rally To $2300+, But When Will It Start?
Chris Vermeulen | Mar 04, 2021 10:11AM ET
One of our readers' favorite tools is the Adaptive Dynamic Learning (ADL) predictive modelling system. This tool maps out technical and price patterns into an array of similar setups using historical data, then applies that data to current and future price bars. Using the ADL predictive modelling tool, we can see into the future based on historical technical analysis that maps statistically relevant price activity and shows us the highest probability outcomes.
Monthly ADL Gold Predictions
Today, we focus on gold and how current price action suggests a bottom is likely near the $,1720 level. The yellow price channels on this monthly gold chart highlight exactly where we believe support is located for gold. If this $1,700 price level is breached to the downside, then the previous lows, near $1,400, are the next support level for gold.
Our ADL predictive modelling system suggests the $1,720 support level will hold, prompting a new rally to levels above $2,200 within 30 to 60+ days. The ADL system predicts an aggressive move in gold near May or June 2021. The move higher may happen earlier than the ADL monthly predictions indicate. There is a chance that a move back above $1,850 starts the move higher before the end of March or April 2021 – propelling gold toward the $2,300+ peak. The actual peak level predicted by the ADL predictive modelling system is $2,315.
2-Week ADL Predicts Gold May Start To Rally Near Mid-March
This two-week gold chart highlights a similar ADL price prediction. What we find interesting about this ADL outcome is the similar price predictions originating from vastly different origination points. The monthly ADL prediction originates from a date of Aug. 1, 2020 – the peak price bar. This two-Week ADL prediction originates from a date of Nov. 23, 2020 – the intermediate low DOJI bar before the recent continue downward trend targeting the yellow price channel.
The similarities between these two unique ADL predictions suggest that gold may attempt to find support fairly quickly near the $1,700 to $1,720 level, then attempt to move above $1,795~1,825 as an early stage rebound off the lower yellow price channel. The two-week ADL price prediction suggests that gold will quickly attempt to move higher, before or near March 20, targeting levels above $1,900. Then, as you can see from the yellow dash lines on this chart, gold will attempt to move moderately higher over the next 2 to 3+ months targeting levels above $2,030.
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If these ADL price predictions are accurate and gold does find a solid bottom near $1,700, then we would want to watch for an upward price trend to start to setup near March 15 or so, attempting to push gold prices above $1,850 to $1,900. If that happens, then the next phase of the ADL price predictions would become even more relevant. That means the upward price trend would attempt to target the $2,050 level, then the $2,300 level before June or July 2021.
Our ADL predictive modelling system accurately called the rally in gold in 2019 and has delivered some incredible predictive analysis over the past few months. You can read some of our earlier ADL predictions here:
- Nov. 22, 2020: ADAPTING DYNAMIC LEARNING SHOWS POSSIBLE UPSIDE PRICE RALLY IN GOLD & SILVER
- Aug. 4, 2020: REVISITING OUR SILVER AND GOLD PREDICTIONS – GET READY FOR HIGHER PRICES
- March 28, 2019: PRECIOUS METALS SETUP FINAL BUYING OPPORTUNITY
Miner ETFs May See Big Gains
In terms of sector ETF trends, a stronger upside move in gold would likely prompt miner ETFs to also move dramatically higher over the next 30 to 60+ days. This VanEck Vectors Junior Gold Miners ETF (NYSE:GDXJ) weekly chart highlights a Fibonacci 100% measured move higher which suggests the $73.91 and $91.71 levels could become our next upside targets.
Additionally, one has to consider the process that would likely prompt gold to move higher throughout this span of time. A continued commodity rally could prompt some of this move to happen, but fear would also have to be factored into this move if gold were to rally above $2,300 as the ADL system predicts. Any renewed fear would likely come from global financial or credit market concerns or be related to hyper-inflation concerns. We'll have to see how things progress throughout the rest of 2021 to really get a better feel for what may be driving this upward price trend.
We suggest traders pay very close attention to what happens in gold over the next 2 to 4+ weeks. If our ADL predictions are accurate, we could see some really big moves in the global markets, various sectors and metals/miners very quickly. If the markets start to roll over and volatility rises, we can benefit from it with our which we use non-direction trades to sell premiums. This allows options traders to profit from volatility and not worry about which way the market moves.
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