Gold Prices Today Are Starting 2018 on a Bullish Note; Here's What's Next

Gold prices today are pushing higher, extending December's 5% rally into the new year. That's not surprising for us, as we are predicting a gold bull market in 2018.

Gold rose above $1,300 on Dec. 28 for the first time since early October, and it had plenty of momentum on its side. That's carried gold prices in 2018 even higher, as the yellow metal is up to $1,314.40 today.

gold prices today

Despite a volatile year for the price of gold, gold gained 12.67% in 2017. Add that to its 2016 gain of 6%, and we have what's increasingly looking like a return to a secular bull market for gold.

And make no mistake, the $1,300 level is too important to overlook. If gold prices hold at this level, then the next target is $1,350.

Given that it took only two weeks for gold to tack on $50 from $1,250 to $1,300, it wouldn't surprise me to now see another $50 added by mid-to-late February.

Here's what's been driving this gold rally over the last week and where gold prices are heading next in 2018...

Why Gold Prices Today Keep Running Higher

Though it was a shortened trading week for gold, it was about as steady and bullish as you could expect.

The precious metal traded on Dec. 26 with an upward bias that would carry it through the entire last week of 2017. The price of gold closed higher as the dollar weakened and ended the day at $1,283.

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On Wednesday, December 27, gold opened at that very same level. Weakness in the DXY came mostly before 8:00 a.m., when it dropped from an early morning high of 93.20 to 93. Gold peaked at $1,288 at 3:00 p.m. then retreated slightly to close at $1,287.

You can see how the DXY consistently dropped over the last week...



On Thursday, the dollar sold off in the morning. That took the DXY down from 92.72 at 8:00 a.m. to 92.64 by 5:00 p.m. Gold benefitted to the tune of $5 per ounce. It opened in New York at $1,290 and closed at $1,295.

And then, as if to end the year's last trading day with a bang, gold buyers pushed the metal right through the $1,300 barrier. The yellow metal opened at $1,296 as the DXY had collapsed further to 92.27. At 12:45 p.m., the DXY tested 92.11, and that helped push gold to a 1:00 p.m. peak of $1,306. A reprieve for the DXY pulled it back to 92.3 by 5:00 p.m., but that was only enough to see gold back off to end the year at $1,303.

Now that gold prices have reached the $1,300 level at the end of 2017, here's the next gold price target for 2018...

2018 Will Be a Bullish Year for Gold Prices

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In order to appreciate the strength of gold's latest rally, you only need to look at the metal's run in candlestick format, and you'll see just how relentless and one-directional it has been.

Have a look...

gold prices

Notice that gold futures have only had a single down day since Dec. 12.

And if we look at the Gold Miners Bullish Percent Index (BPGDM), it has now moved from about 21.5 to 28.5, providing more ammunition for gold stock bulls.

gold price

Examining recent gold price action, we see gold's rise is coming even though there's been slightly lower than average volume.

gold prices in 2018

That tells me this rally still has plenty of doubters sitting on the sidelines. And yet the 50-day moving average has just flattened after falling for six weeks, the 20-day moving average continues to trend upward, and momentum indicators are clearly on gold's side.

We could see a bit of a breather in gold prices at any time, especially after such a persistent two-week rise. But seasonal tendencies are clearly in gold's favor through late February.

You see, 2017's gain of 12.67% is gold's best annual performance since 2010, so momentum is on its side.

For these reasons, I see gold hitting $1,350 by late February. And if we get there, $1,400 starts to look a lot more "normal" in 2018, maybe even before mid-year arrives.

Rest assured, gold's rally will continue through 2018.

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