Our Newest Gold Price Forecast

For nearly the entire month of October, gold has been "stuck" in a trading range.

The precious metal has been meandering between $1,250 and $1,275, seemingly directionless. But our newest gold price forecast shows a scenario where gold climbs by double digits in the next several months.

The big story this month has been the surging U.S. dollar, which has gained against most major currencies for the past month and beyond.

gold price forecastIn fact, in the last 30 days, gold is down in the U.S. dollar, the euro, the Japanese yen, the Canadian dollar, and the Swiss franc. The one standout is the British pound. Thanks to fallout from this summer's Brexit vote, the pound has tanked and gold prices in this currency have soared.

We still have the backdrop of a fast-approaching U.S. presidential election and a highly anticipated rate hike for mid-December.

In the meantime, seasonal tendencies for gold gains are medium at best.

Let's look at how all these factors will shape the price of gold over the next few months. Plus, we'll discuss the reasons for my new gold price forecast...

How Gold Prices Are Trending Now

After an early and short-lived spike to $1,272 on Monday morning, gold prices retreated back to $1,263.

Editor's Note: We've found a special profit opportunity for investors, but there are only a few days left to get all the details...

It worked its way back up to $1,269 by Tuesday morning, and then kicked into higher gear. By 10:00 p.m., the price of gold had climbed all the way to $1,276.

But sellers got the upper hand by early Wednesday, and by midday gold had retreated back to $1,266.

Thursday saw a new mini-spike around the New York open, taking the gold price temporarily back up to $1,272. But a renewed surge in the dollar weighed sufficiently on gold to pressure it down to $1,269 near the close.

That volatility in the spot gold price should continue until the precious metal gets its next big cue.

While gold prices have been holding their own in U.S. dollars, the precious metal has actually been soaring in some other major currencies this week.

Our New Gold Price Forecast

Here are two charts comparing gold's performance in several currencies.

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gold price prediction

gold prices

The first takeaway from these charts is that gold prices have been soaring in most major currencies over the last year. Of course, with the U.S. Dollar Index making nine-month highs, it's been a formidable headwind for many other currencies. And as they weaken, it takes more to buy an ounce of gold.

But even in U.S. dollars, gold is up 9.6% in the last 12 months.

Investors should note from this chart that over the past year, gold is down in just one currency, the Japanese yen. The other thing to look at is the British pound. Of course, we all know what's going on there. The UK voted to part ways with Europe back in June, and now there's concern the economy will suffer as it "goes it alone."

That's weighed tremendously on the pound. By late September, gold had gained nearly 40% in pound terms over 12 months. That provided a formidable hedge to anyone with most of their assets denominated in pounds. But to benefit, they had to own sufficient gold.

Here's another chart, this one of gold priced only in pounds.

price of gold

In U.S. dollar terms, and probably most major currencies, I think gold will continue to mostly "tread water" for the next few weeks and perhaps even into December. Once the election is over, gold could lose some safe-haven appeal. From there, I think the focus on the next rate hike likely for mid-December should keep boosting the dollar and keep weighing on gold.

If these scenarios play out, gold could struggle to close the year near $1,300.

But the rate hike could create turbulence in the market. Remember last December? After the Fed raised rates, the Dow dropped 10% in six weeks.

That's when gold lifted off as stocks tanked. A similar setup could be in the cards.

If that's the case, $1,400 may not be far off into early 2017. That would be a gain of 10% from this week's levels.

Up Next: Our Newest Gold Price Prediction Indicates Triple-Digit Returns by 2020

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