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After falling 6.8% from the June 6 peak of $1,298, the price of gold seemed to have finally hit a bottom on Friday, July 7.
That was when gold prices fell 1.1% to $1,210 - the lowest since March 15. However, the metal has rebounded 1.5% since then to today's gold price of $1,230.
This week's gains mostly came from renewed weakness in the U.S. dollar. After all, the U.S. Dollar Index (DXY) has declined from 96 basis points on July 7 to 95.27 today.
And the dollar's weakness is no real surprise, thanks to the U.S. Federal Reserve.
Although the Fed has been "talking tough" about raising rates and unwinding their $4.5 trillion balance sheet, the reality could be something else entirely.
Inflation is falling below the Fed's 2% threshold again, with new data showing a slowdown in June to 1.6%. That's down from 1.9% in May and a five-year high of 2.7% in February. And in Fed Chair Janet Yellen's Congressional testimony this week, she admitted the global inflation slowdown could call for an "adjustment" to the central bank's policy.
In other words, interest rates may not rise as fast as we've been led to believe, and that could continue pressuring the U.S. dollar while boosting the gold price in 2017.
I'll show you exactly how high I see gold heading this year, right after we look at the metal's rebound this past week...
Gold Prices Rose 1.5% This Week from a Four-Month Low
After hitting a potential bottom of $1,210 on Friday, July 7, the gold price opened lower, near $1,206, on Monday, July 10. Although the DXY rose above 96 in the morning, it leveled off throughout the day, allowing gold to steady at a higher price. The price of gold ended the day at $1,214 for a slight gain of 0.3%.
Tuesday was similar, with the price of gold falling in the morning before rebounding later in the session. It opened lower at $1,210 that morning, but moved higher after the DXY dropped suddenly from 96.18 to 95.68. This pushed the metal to $1,217 by the close, marking a 0.2% rise for the session.
Here's the DXY's action over the last five trading days...
Gold built more bullish momentum on Wednesday. It opened flat at $1,217 but traded up in the $1,220 range for most of the day. Prices eventually settled 0.2% higher at $1,220.
However, Thursday saw some profit-taking from gold investors as the gold price fell back to $1,216 in mid-morning trading. It edged higher to $1,218 by the close, but still saw a 0.2% loss on the day.
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But the gold price today is making a strong comeback, up 1% to $1,230. That puts the metal on track for a weekly gain of 1.5%.
Gold's rebound this week makes last Friday's four-month low look like a true bottom for prices. If that's the case, I could see the gold price running much higher through the rest of the year.
Here's my bullish gold price forecast for the rest of 2017...
Price of Gold Could Reach These Bold Targets by the End of Q3 2017
About the Author
Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.