Summary
Long-term Gold Forecast.
Aggressive Play in Gold: Direxion Daily Junior Gold Miners Index Bull 3x Shares ETF.
Less-Aggressive Play in Gold: Taseko Mines.
Long-Term Gold Forecast
Based on the EMA2 Trade Live Analytics's proprietary Variable Changing Price Momentum Indicator (VC PMI), I analyzed levels of supply and demand for gold that I expect to see for the twelve months from September 28, 2017 to September 28, 2018. The outlook is bullish and there are two excellent aggressive plays to take full advantage of the forecast: Direxion Daily Junior Gold Miners Bull 3X Shares (NYSE:JNUG) and Taseko Mines Limited (TO:TKO).
On September 28, 2017, gold closed at $1288, above the 50-day moving average, which I use for long-term trend analysis and confirms that the long-term trend momentum for gold is bullish. The VC PMI also gives you the other side of the trade. If the market closes below $1253, it would negate this long-term bullish trend and turn neutral. I use the long-term trend momentum to get a clear picture of the long-term trend analysis using the 50-day moving average.
I also analyzed the yearly price momentum based on a yearly moving average, which for gold is $1263. The yearly moving average is based on analysis of supply and demand. The market closed at $1288, which indicates that the long-term price is bullish. The VC PMI forecasts an average price for gold over the next twelve months of $1264. The fact that the market closed above the $1264-level gives us an indication that the long-term price momentum is bullish coming into the next 12 months.
The VC PMI algorithm also gives us a protective level which you can choose to use to identify a change or shift in the market. Depending on your objectives, you can use this information to position yourself accordingly. A price above $1264 is bullish, which automatically identifies for us the extreme of the supply for next year. The extreme supply levels are at $1386 to $1484. The yearly trend is bullish and the average price is $1264 for the next year, which also identifies the extreme above the mean. You can use the extreme above the mean as your target, which are $1386 to $1384 and are the sell 1 and sell 2 levels. We recommend easing out of long positions at the sell 1 and 2 levels as you take profits off the table.