The price of gold consolidated again last week, but that stage of the climb might already be over. If the "golden staircase" pattern continues, gold prices could jump higher again soon.
Gold spent January like a lion, then entered February like a lamb. But momentum and interest have been building for the asset.
Early last week, gold rallied to a 10-month high, hitting my most recent target before dropping back. But even that retreat was short-lived as bargain hunters stepped in.
And that has the sector abuzz.
With U.S. growth likely slowing, the newly dovish Fed is going to be very hesitant to hit the brakes via rate hikes. In fact, its next move may even be back to the gas pedal via rate cuts.
As it turns out, consumers looking out five to 10 years have lowered inflation expectations to 2.3%, equalling the lowest level on record. Even some Fed insiders have argued inflation should be allowed to overshoot 2%.
Once real interest rates head back toward zero and below and inflation outpaces yields, gold prices will soar.
Here's what happened with gold prices last week - and why I'm still bullish in my latest gold price prediction...
The Price of Gold Built Even More Momentum
Gold started roaring back this past week, hitting a 10-month high and my latest target at $1,340.
That means it easily surpassed January's high of $1,320, my previous target.
This Could Be the Most Profitable Dollar You Ever Spend: Tom Gentile's Cash Course covers all the essential trading ideas you need to know to potentially make thousands in extra income every week. Get access for $1...
Tuesday's (Feb. 19) action was explosive, certainly helped by a big retreat in the U.S. Dollar Index (DXY). The dollar sold off, and the DXY dropped from above 97 to below 96.5 in a matter of hours, powering gold to $1,340 by noon. The dollar stabilized and the DXY remained near 96.5 while gold did the same and closed at $1,341.
Gold opened slightly higher on Wednesday (Feb. 20) at $1,343, peaked at $1,346 at noon, and then saw profit-taking set in as it dipped back to close at $1,338.
Here's the dollar's action in the form of the DXY for the past week:
On Thursday (Feb. 21), unsurprising profit-taking emerged in gold, aided by a bit of renewed dollar strength. The DXY regained 96.6 while gold fell back to close at $1,323.
But that didn't last long, as bargain hunters bought the dip on Friday (Feb. 22). The DXY dropped back below 96.5, while gold rallied to $1,330, a level it held at mid-afternoon.
That's actually great news for the price of gold.
In fact, it puts gold on the trajectory to hit my latest gold price target...
Why My Gold Price Prediction Remains Bullish
Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter
Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…