Gold’s Decline: What’s Next?

Just last week — in one of my strongest warnings yet — I told you that gold’s decline wasn’t over. I received a lot of flak for that one. After all, many of the very best analysts in the world and some of the top hedge fund managers were all very bullish on gold.

But gold did indeed slide. Quite a bit, falling from as high as roughly $1,257 last Monday to as low as $1,206 on Friday.

So what’s next for gold? For silver? For the other precious metals? For mining shares?

My answer: After a brief bounce, still lower for all of them.

Why? Three chief reasons:

First is the degree of the slide into June 21 shown on this chart. It’s very sharp, very steep.



Click image for larger view

It’s my latest artificial-intelligence forecast chart of gold. You can clearly see that not only is gold following the green forecast line to a tee, but that there is also no bottom in sight until around June 21.

Second is the fact that gold has now closed well below an important support level at $1,226.

That’s bearish for gold heading into June. On a bounce, we may see a retest of the $1,226 level, but then gold would head to new lows in late June.

Third is the fact that the latest Commitment of Traders (COT) report shows yet again another record high of speculative long positions in the gold market. Do not underestimate this. It is extremely bearish.

At a record number of long positions in gold — even more long positions than when gold went over $1,900 in September 2011 — this is indeed a very bearish sign. It means that despite the recent selloff in gold, the longs have not yet been spooked enough into a panic.

That panic will soon come, probably in June, and it will likely push gold down to the major support levels at $1,160 to $1,140.

Ditto for silver and the other precious metals, as well as for most mining shares.

So what should you do if you didn’t listen to me and you got caught in this rally and in mining shares … and you are now facing the potential for steep losses?

A. You can sweat it out and hold your positions and hope you come out the other side okay.

B. You can hedge using inverse ETFs for gold, silver or miners, such as GLL, ZSL,
and DUST. Or …

C. You can exit your positions on a bounce … and get back in when the metals and miners bottom in the latter part of June.

If it were me, I’d choose "C."  But that’s just me.

Meanwhile, I am overjoyed with the decline in the precious metals. And so are my subscribers. I forewarned them of this decline and I have them fully prepared now to capitalize on it as the decline comes to a close in the latter part of June.

In fact, they’re going to be positioned in such a way that I expect them to make a lifetime of profits — a few times over — in just the next three to five years, as gold works its way back up to its destiny of over $5,000 an ounce.

Thing is, most investors won’t participate. Many will get burned because of the recent pullback, and they won’t come back into the metals market, if at all, until it’s too late.

Others won’t be buyers because — as I’ve said all along — the new bull market in precious metals and miners won’t be built on the backbone of inflation …

But instead, on the backbone of governments gone madly insane, authoritarian, and bankrupt.

For evidence, all you have to do is scan the globe and you’ll clearly see the trouble the world is in. From the Middle East and Russia to the Far East and Europe. And from Europe to the United States.

The handwriting is on the wall. All you have to do is time your investments right.

Best wishes, as always …

Larry

Larry Edelson, one of the world’s foremost experts on gold and precious metals, is the editor of Real Wealth Report and Supercycle Trader. Larry has called the ups and downs in the gold market time and again. As a result, he is often called upon by the media for his investing views. Larry has been featured on Bloomberg, Reuters and CNBC as well as The New York Times and New York Sun.

Comments 74

Eric June 1, 2016

Could you comment on how we can reconcile the June 21 correction with the expected jump in gold price should the Fed not increase the interest rate on June 15 - which is a week before June 21. Thanks.

Chuck Burton June 1, 2016

But if the Fed DOES raise rates, June 15, gold should fall a little more, at least for a short time, which could fit with the 6/21 bottom very nicely.

Felipe June 1, 2016

What makes you think another rate hike will be bearish for Gold? The fed finally "raised" rates in Dec and yet that was extremely bullish for Gold. You have many people like Peter Schif who think the outcome could be bullish for Gold regardless of what they do because if they do raise it again, the market won't like it - again. There could be a very short term dip if they do raise rates.. and so a June 21st bottom to reload could make sense because that's 1 week after the Feds decision.. however, I have a hard time seeing a new low, lower than 1045. It would have to be a very steep fall as Larry suggested. But again, any black swan event could change everything. Forget about a bottom and just keep backing up the truck ;)

Sohail June 4, 2016

Eric your comment on 1 June proved remarkably prophetic. The us jobs report was such a shock that it propelled gold sharply higher. I guess some of the movement was short covering.

Michael Biles June 1, 2016

Would you hedge now even if your advice was heeded and don't have significant gold or silver holdings?

yossi June 1, 2016

Very good well done.thanks

Bharat June 1, 2016

Your short term prediction on golds movement was correct..i hope your longterm forcast go right..i have added to my pisition

David June 1, 2016

Easy to understand what your saying

Rick June 1, 2016

Oink oink I feel like a hog at a slop trough ready to chow down June 21st. Thanks fir the metals update! Keep us abreast, Sir. A Blt sandwich sure sounds good now that I think of it --I bet someone will eat one now bc of my post :) Larry, what's your gdx target for a low this month? You think this correction will extend into July, or just this month? After the low this month will gdx double by September?

B Zames June 1, 2016

Larry You keep pushing later and later into the future, the bottom for gold, precious metals and mining stocks. Now its late June not late May. What's up? Bob

Chuck Burton June 1, 2016

Could be the uncertainty about what the Fed will do, as well as Brexit. A small rate increase could cause a further short drop of gold, hesitation, 6/21-6/23, then a boom higher, if Britain does vote to exit the EU. Not saying that will happen, but it would fit with Larry's view.

UDO June 3, 2016

B Zames You should read Martin Armstrong's stuff - yes, it's getting later and later and from the last time I read something 2017 is still not the time for gold to shine . Why is it like that ? Because nobody really knows years ahead of time .

Krissta King June 1, 2016

Sounds grounded and informed. I think I will call and subscribe. I stress because I am already retired & what I have is ALL I have. Lost a lot in the last debacle. Wonder how will I know if or which of your recommendations will pay dividends? Your plan does sound good.

Chuck Burton June 1, 2016

Few P/M stocks pay dividends, and very small ones, then. You have to play them for price increase. That will be your "dividend", Krissta, and probably a lot quicker than those quarterly checks. At the bottom, with gold/silver/etc. stocks selling for a couple of bucks or less, if you buy thousands of shares, you can sell off a bit at a time after they grow, for income. Cap. gains tax rate, also. Just keep an eye on them, and sell if they start falling.

Angelo June 1, 2016

Thanks Larry for this forecasting, I am with you angelo

Brian C June 1, 2016

Larry, great insight and strategies that you offer! Wondering if you can share with us what the different colored lines represent? Thanks again for the update.

J Sanderson June 1, 2016

What does the purple line represent? It is moving sharply higher in August while the green line is moving lower.

Ray Simpson June 1, 2016

Which miners do you think will rise. Thanks

Howard June 1, 2016

Larry This is important. Google BREXIT THE MOVIE for a complete analysis of what will happen, why it will happen and who will be most affected. The exactness of when is a little difficult just yet, but you are right about Europe.

Craig June 1, 2016

A dangerous game to play Larry. One black swan and it is off to the races while those seeking a buying opportunity at a bottom are left sitting on their hands. Keep in mind that many of us already booked 100% profit on numerous miners including 160% on Kinross. Took some profit, let the rest ride and have cash for the bottom you are calling in a few weeks. But gold is holding against strong odds here at 1200. I think this is your bottom.

Terrell Stanley June 1, 2016

What form of gold should an individual investor buy?

F151 June 1, 2016

I would go with option 3 also. We should have a bounce back to $1250 area over next week or so....just looking at the chart.

stevo June 1, 2016

Late June = BREXIT vote in the UK. There could be real movement in the £ gold if BREXIT wins..... As a Brit I trade gold in British pound (£) so let's see.

Karin June 1, 2016

Hi again! Well yes, I guess timing is the tricky bit. And sometimes the window for a sell or keep decision seems to be quite small. Thanks for your offering of A,B and C strategies. I'm wondering if you have any thoughts on counterpart risks in the years to come. If and when gold goes to the moon will the companies issuing leveraged certificates really be able to keep good on their promises? Karin

russell June 1, 2016

Real Wealth Follower. I truley hope after the ten plus years I have follow you that you include Junior miners to buy in your Real Wealth report. I am a senior an cannot afford another service. I would like a DOW 31000 kit. Thank you for all your hard work.

Sandor June 1, 2016

Nice call, Larry. Two of your new mining share recommendations are ones that have been on my radar since the recent breakout, also.

Peter W June 1, 2016

Harry Dent says gold goes down to $750 & below as other markets slide...are we average citizens going to get clobbered again by having to prop up institutions that are debt-ridden?

Bonnie E June 1, 2016

Peter W, I'm with you! Whatever happened to Larry's call for gold to go down to $1,000 and oz. or less? Have things changed to the extent that that call has been completely abandoned? 1,000 gold (TM), looks like you've been left behind...................

Peter Vella June 1, 2016

Hi Larrry, Thank you once again for your informative insight to precious metals! Best wishes, Peter Vella.

Aidan Fallon June 1, 2016

Thanks for the update Larry great call on the pull back. Could you give some tips/advice on bottom fishing the end of the pull back? Are we to look more towards time rather than price or what is your approach? Many Thanks, AIdan Fallon

Denis June 1, 2016

Hi Larry, I hear you loud and clear.As always your mostly RIGHT.When you give the buy alert,make it very obvious. Thanks again, Denis

Justin June 1, 2016

If gold can't hold above $1,125/oz. this month, then last December's low was not the turning point low. If it moves to or below last December's low, then the whole $5,000/oz. scenario timeline gets pushed out two to three years.

Patrick June 1, 2016

If we look at the ten year treasury we see a descending wedge forming, this is a reversal pattern, where do you see treasuries going in the future????

Scott June 1, 2016

Doubtful that gold will drop below $1045, given the monthly buy signal that's been in place since January. A Fib retracement to 1160-1180 is most probable. Silver will be the big buy at 15.50 to 16. Load up.

Nick June 1, 2016

Again excellent call Larry!. Which sector do you expect to do better ETF or mining?

smitty June 1, 2016

I'm up overall in my mining positions an average of 80% by buying in Jan/Feb and sitting tight regardless what the market is doing short term...these pullbacks are buying opportunities to dollar cost average even LOWER average share prices on the miners a person intends on keeping in the next 2-5 year bull cycle in metals.

Pelz June 1, 2016

Larry, Would it be better to hold Gold & silver stocks with losses and just hold for the long for it to catch back up instead of eating the loses and spending commissions. You said gold would go up to $5,000 oz seems to me holding for such a great return would be worth the wait?

Doug June 1, 2016

If I were you, I would just hold on. And if you have any more $ to invest wait until gold drops to $1140-1160 range then add to your positions or buy different miners to diversify even more.

Lee June 2, 2016

Good call

Mike Whaling June 1, 2016

I'm starting to sense that old "hide it under the mattress " feeling!

Ottman empriorement 2 June 1, 2016

would think you if gold &sliver keep going UP and you would to bring it down, so you could Buy up more for George .

Gerald H. June 1, 2016

Larry, Thank you for your insights, I think Miners have a lot more to fall because it has not caught up to Gold decline yet. There are many other analysts and services telling their subscribers to keep buying PM's and Miners on any drops. I personally had place a 20% trailing stop on all of my Miners and so far so good. Had JNUG and NUGT and after the 20% trailing stop hit sold for a 700% and 550% profit respectfully. Now if I had kept holding them I would be down almost 50% today. And now holding shorts on Miners and making a good profit on them, But I think the Miners and Juniors have a lot more down side to go. Thanks Again Larry and Can not wait for Million $ Junior Miners to be Available.

Chris Peacock June 1, 2016

I feel for you, Larry: the amount of stick you've had to take for advocating the sensible investor's approach. I've lost count of how many times you've patiently explained that you wait for the first pullback in a new bull market to confirm that the low really is in. If the pullback stops at or above the previous low, and then rockets higher, then a new bull market is confirmed: buy with both hands! If it heads lower still, then this rally was just a head-fake in an ongoing bear market. There are no certainties in investing. Yet there are people on here who think that there are: one thinks gold will never drop to your buy target, another thinks it will go to $750, yet another wonders why your models didn't pinpoint the pullback in gold to the day and to the cent. I sigh and shake my head, as you must too. Thank you for getting the big picture right, time and time again. And good luck to those who think they can predict gold or any other market with precision, and never need to revise their predictions. I wonder why they aren't as well off and well known as you are??!!

Mekand June 1, 2016

Hi Larry Is gold n silver up in Angust 2016 or Dec 2016 when we sell off, what will be the $ value than? ( please reply this question ) Thks alots mk

Cynthia June 2, 2016

Want to thank Larry for his computer privacy article. It is clear detailed and Hugely helpful Thank you thank you thank you Cynthia Roberts

mike June 2, 2016

I would rather have an ounce of gold than 1500 two cent dollars that are worth 2 cents only because of our faith? in our bankrupt Government.

Mike June 2, 2016

Larry, What about your RWR recos to buy gold bullion at $1,207 and silver bullion at $15.75?

Michael b June 3, 2016

Wow what a pop for gold and the mining share today jdst up 30% today.

Michel Akras June 3, 2016

Hi, Given the figures of today, and the sharp rise in the yellow metal, are your prediction all the way to the 21st June still standing or are they changing after today's results?. Thanks.

Craig June 3, 2016

Larry, Now that we gapped above 1226 gold price on Friday.. what did you suggest? Why are we messing around with your call for mid 1100's (for the past few months)when the upside you see after in a few years is north of $3000. Appreciate your reply in advance.

Craig June 3, 2016

This your letter from Wednesday.. You sounded very certain... Third is the fact that the latest Commitment of Traders (COT) report shows yet again another record high of speculative long positions in the gold market. Do not underestimate this. It is extremely bearish. At a record number of long positions in gold — even more long positions than when gold went over $1,900 in September 2011 — this is indeed a very bearish sign. It means that despite the recent selloff in gold, the longs have not yet been spooked enough into a panic. That panic will soon come, probably in June, and it will likely push gold down to the major support levels at $1,160 to $1,140. Ditto for silver and the other precious metals, as well as for most mining shares. So what should you do if you didn’t listen to me and you got caught in this rally and in mining shares … and you are now facing the potential for steep losses?

russian bear June 3, 2016

quote: "clearly see the trouble the world is in. From the Middle East and Russia to..." what is the "trouble" with russia? why yanks are so prone to invoke "russian troubles"? amazing. obviously they view the balmy "ukraine" as part of russia.

John June 4, 2016

So what happens next if the one day gold rally keeps going do to dollar weakness? John

Michael b June 4, 2016

Larry I haven't seen you comment on any of these questions. Do you plan on doing that ?

Chris Peacock June 6, 2016

Why would he comment? He's already made his position perfectly clear. "Real Wealth Report" is meant for investors, not day traders. So he's not particularly interested in one or two days' worth of price action, however dramatic. As a subscriber, I have a lower price target below which to buy - provided crucial support levels hold. Larry has also given a higher price target above which to buy - provided gold holds above that level on a weekly close. Neither the lower nor the higher targets have been reached, so all the panicky questions obviously come from non-subscribers (or subscribers who can't read). Why would he add to the free information he's already given (including, BTW, a prediction for a bounce)?

RC June 4, 2016

Larry, With the rally on Friday, 6-3- 16 do you still see Gold correcting to 1160-1140 Thanks

Pete June 4, 2016

Gold blasted through 1226 Friday, the Dollar got hammered. If the economy is really in trouble (everyone knows it is) the Dollar is going down, gold is going up!! 1200 was the bottom. You kept me out of most of the latest run in gold, not this time. We'll see what Yellen has to say on Monday.

Bonnie E June 4, 2016

What Yellen has to say? I suspect I already know. It'll be more of the same old same old... Threatening to raise rates (still pretending they have some amount of control) but hawkishly dovish as they continue to review "the data."................... At some point, the old "song and dance" of the central bankers......ie: "Whatever it takes" ......will not have any affect on the markets, because it will be recognized by everyone that it's only just so much hot air......... I still believe that, once the markets start falling in earnest, gold with go down with them! I predict that the move will be breathtaking, shocking!! Not even the doomsayers will be expecting what actually happens!

Bonnie E June 4, 2016

Why am I so negative? I'm not negative for the long-run....but DEFINITELY negative in the near-term. No one can borrow their way out of debt!! The U.S., not to mention the economies of the world, is in severe "credit card trouble".....too much revolving debt...with absolutely NO hope of paying that debt off!! It simply cannot go on forever!

Chris Peacock June 6, 2016

Pete: have you looked at a long-term chart of gold? The current rally looks like a pimple compared to gold's bull run from 2000 to 2011 - or, indeed, compared to gold's bear market from 2011 to 2016. From an Elliott Wave perspective, the current rally looks suspiciously like the fourth (up) wave of a five wave bear market - with a fifth (down) wave to come - and a final lower low. That may or may not be correct, but every sensible investor knows that you make more money by avoiding losses than by trying to capture an entire bull market from the absolute bottom to the absolute top - which no-one, repeat NO-ONE, has ever done. Why are you castigating Larry for waiting to be confident that a new bull market has begun, and trying to save you from losses if it hasn't?

john June 4, 2016

Larry What are you on about ? Gold has increased in price ? Where are you getting your gold ?

Bull June 4, 2016

And now one of my favorite alltime songs from the movie Goldfinger song by Shirley Bassy Goldfinger is a man , a man with a midas touch a spider's touch . Such a cold finger . Beckons you to enter his web of sin ., but dont go in

Sandor June 4, 2016

I am confident that we are in a new bull trap after Fridays candlestick move. Still shorting until near the end of June.

Bonnie E June 4, 2016

I have to support Larry this time. He did predict the move that happened Friday in this article posted the previous Wednesday: "So what’s next for gold? For silver? For the other precious metals? For mining shares? My answer: After a brief bounce, still lower for all of them." So, there was our anticipated "bounce." ....may or may not be completely finished all in one day........Look out below!!??

James June 4, 2016

Watch what China does. They stated in July 2015 the Yuan would be gold backed on June 16, 2016. (In 12 more days). They already set up their gold exchange due to the manipulation of gold prices by the London Exchange. Our dollar continues to drop. Yesterday, it dropped $2.00 on the dollar index. The Petro dollar, which used to prop up fiat currency, and helps prop up the artificial prices in the stock market, is no longer being used by at least 40 countries. There is an agreement for at least 160 countries to adopt the gold -asset back standard, and fix the price of gold at $450-455 per oz. This will happen relatively soon. I am amazed Larry hasn't seen this or reported on this. If I owned gold I would be out ASAP. The US will be forced to adopt the gold standard as soon as China does, or preferably sooner, or we will see tremendous inflation until it does.

Pearl June 6, 2016

Interesting...I wonder if this is why everyone says US is dumping gold and its heading East

Michel June 4, 2016

Lost a small fortune after -33% decline friday: Another one bites the DUST.

Jim June 5, 2016

Larry, 1140 to 1160 Gold still in the forecast? Should on "DUST" (Short) to these levels over the next 2-3 weeks as forecasted last Wed? Is JUNG that best Bull when the time is right? Thank you!

Don June 5, 2016

I am not sure Gold/Silver will do much good if governance all over the world breaks down b/c the people have lost all sense of morality. So - if you replace the government with something new - you have done nothing to address the fall of the prior governance....-that being the people who just no longer care.

Pete June 6, 2016

Chris, Sitting on the sidelines can be the best bet sometimes. But if this "very sharp, very steep decline" now scheduled "into" June 21st doesn't pan out and gets rescheduled, I won't wait. -Pete

Thomas June 11, 2016

what can u tell us about this new bitcoin.2 . does it stand a chance and were to buy if posible thanks tom

harold June 16, 2016

what happened to that correction in gold untill 21 june? Let us know your views now. Thanks Larry

Alan June 16, 2016

I second that, it never went down, still waiting... what happened or didn't happen?

Peter W June 16, 2016

Who is correct Harry Dent says gold to $750 or Porter Stansberry who says gold to $5,000? Both men very smart who base their conclusions on various conditions of Doom & Gloom for the near future...that is central bankers' negative interest rates like Germany, China moving to gold-backed currency, US$ possibly losing reserve currency status...Where are we going?