My Gold Price Prediction Shows a Rally After the June FOMC Meeting

As the broader market indexes have done little better than move sideways, the gold price has naturally reacted with a little weakness.

Since last Friday (June 2), the Dow Jones and S&P 500 are up just 0.5% and 0.2%, respectively. Meanwhile, with the price of gold today (June 9) down 0.6% to $1,272, the precious metal is on track for a slight 0.5% weekly loss.

Still, it's a negligible loss considering the milestone gold hit this week. Prices closed above $1,297 on Tuesday - the highest level this year - and just inches away from the all-important $1,300 mark.

And yet, almost no one is noticing. That's normal behavior since stealth gains tend to be the most sustainable. After all, bulls hate to be followed.

Early next week, we could see some more sideways movement leading up to the outcome of the FOMC meeting on June 14. And that may well be the trigger to send gold past the $1,300 mark.

Before diving into my near-term and long-term price targets, here's how gold prices have trended this week...

Gold Price Is on Track for a 0.5% Weekly Loss

After closing at $1,279 on Friday, June 2, gold opened on Monday, June 5 a bit higher at $1,281. However, trading was mostly uneventful due to steady movement in the U.S. dollar. The price of gold settled at $1,279 for no gain.

For reference, here's how the U.S. Dollar Index (DXY) has performed this week...

gold price

The metal saw some big action on Tuesday, opening much higher at the $1,291 level. It hit a peak of $1,294 by the afternoon and managed to close at that level for a 1.2% gain.

Wednesday brought out the sellers who wanted to lock in some profits. Gold prices started the day at $1,291 and worked their way gradually lower as the dollar had a few bursts of strength. The gold price closed 0.5% lower at $1,287.

Urgent: An incredibly rare gold anomaly is shaping up in the markets as we speak -- one that has occurred ONLY twice in the past 20 years. And it's about to happen again. Details here...

Losses continued on Thursday, June 8, as a relief rally in the DXY from 95.65 all the way up to 97.20 forced gold to give up most of its weekly gain. Prices opened lower at $1,283 and fell throughout the day to settle 0.7% lower at $1,278.

And the downward trend for the price of gold continues today as it fell 0.6% to $1,272. With that, gold prices are on track for a weekly loss of 0.5%.

Despite this week's loss, gold is still pushing higher on a long-term time frame. It's up 5.7% over the last three months and 4.6% in just the last month alone. This indicates any brief pullback - including this week's loss - won't last.

That's why I want to show you my bullish gold price predictions for both the near term - especially in regard to next week's Federal Reserve meeting - and for the second half of 2017.

Here's how high I see the metal going...

My 2 Bold Targets for the Gold Price in 2017

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One bullish indicator for gold prices moving forward is that they still remain well above the 50-day moving average of $1,259.75 (the blue line in the chart below). This shows it still has room to run higher before becoming markedly overbought, and a small pullback or sideways action early next week could help build energy for another push higher.

price of gold

If we look at the action in gold stocks versus the gold price, it starts to get interesting...

After catching up somewhat in early May, the gold stocks/gold ratio pulled back until this past week. On Tuesday, gold miners - represented by the NYSE Arca Gold Bugs Index (HUI) below - came roaring back 4.7%, nearly four times the 1.2% gain in the gold price that day.

price of gold in 2017

And as I mentioned earlier, the price of gold came very close to the all-important breakout above $1,300, which is at the top of the long-term price wedge below...

gold price in 2017

I think a clear and sustained break above $1,300 will help kick off a new rally in gold prices. This will entice gold mining stocks to play catch-up in a huge way.

The trigger could be a Fed rate hike next week, which has a 99.6% chance of happening according to CME Group's FedWatch Tool. From the $1,300 level, my $1,400 target for the second half of 2017 would only be a 7.7% additional gain, which is looking increasingly achievable.

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