Predictive Modeling Suggests A New Gold Rally

One of our readers’ favorite tools is the Adaptive Dynamic Learning (ADL) predictive modeling system. This tool maps out technical and price patterns into an array of similar setups using historical data, then applies that data to current and future price bars. Using the ADL predictive modeling tool, we can see into the future based on historical technical analysis that maps statistically relevant price activity and shows us the highest probability outcomes.

Monthly ADL Gold Predictions

In this research article, we’re going to focus on Gold and how current price action suggests a bottom is likely near the $1720 level. The YELLOW price channels on this Monthly Gold chart highlight exactly where we believe support is located for Gold. If this $1700 price level is breached to the downside, then the previous lows, near $1400, are the next support level for Gold.

Our ADL predictive modeling system suggests the $1720 support level will hold, prompting a new rally to levels above $2200 within 30 to 60+ days. The ADL system predicts an aggressive move in Gold near May or June 2021. The move higher may happen earlier than the ADL Monthly predictions indicate. There is a chance that a move back above $1850 starts the move higher before the end of March or April 2021 – propelling Gold toward the $2300+ peak. The actual peak level predicted by the ADL predictive modeling system is $2315.

2-Week ADL Predicts Gold May Start To Rally Near Mid-March

This 2-Week Gold Chart highlights a similar ADL price prediction. What we find interesting about this ADL predictive modeling outcome is the similar price predictions originating from vastly different origination points. The Monthly ADL prediction originates from a date of August 1, 2020 – the peak price bar. This 2-Week ADL prediction originates from a date of November 23, 2020 – the intermediate low DOJI bar before the recent continue downward trend targeting the YELLOW price channel.

The similarities between these two unique ADL predictions suggest that Gold may attempt to find support fairly quickly near the $1700 to $1720 level, then attempt to move above $1795~1825 as an early stage rebound off the lower YELLOW price channel. The 2-Week ADL price prediction suggests that Gold will quickly attempt to move higher, before or near March 20th, targeting levels above $1900. Then, as you can see from the YELLOW DASH LINES on this chart, Gold will attempt to move moderately higher over the next 2 to 3+ months targeting levels above $2030.

If these ADL price predictions are accurate and Gold does find a solid bottom near $1700, then we would want to watch for an upward price trend to start to setup near March 15th or so, attempting to push Gold prices above $1850 to $1900. If that happens, then the next phase of the ADL price predictions would become even more relevant. That means the upward price trend would attempt to target the $2050 level, then the $2300 level before June or July 2021.

Miner ETFs May See Big Gains

In terms of sector ETF trends, a stronger upside move in Gold would likely prompt Miner ETFs to also move dramatically higher over the next 30 to 60+ days. This GDXJ Weekly chart highlights a Fibonacci 100% measured move higher which suggests the $73.91 and $91.71 levels could become our next upside targets.

Additionally, one has to consider the process that would likely prompt Gold to move higher throughout this span of time. A continued commodity rally could prompt some of this move to happen, but fear would also have to be factored into this move if Gold were to rally above $2300 as the ADL system predicts. Any renewed fear would likely come from global financial or credit market concerns or be related to hyper-inflation concerns. We’ll have to see how things progress throughout the rest of 2021 to really get a better feel for what may be driving this upward price trend.

We suggest traders pay very close attention to what happens in Gold over the next 2 to 4+ weeks. If our ADL predictive modeling is accurate, we could see some really big moves in the global markets, various sectors, and metals/miners very quickly.

You don’t have to be smart to make money in the stock market, you just need to think differently. That means: we do not equate an “up” market with a “good” market and vi versa – all markets present opportunities to make money!

We believe you can always take what the market gives you, and make CONSISTENT money.

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Chris Vermeulen
Technical Traders Ltd.

Disclosure: This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation for their opinion.