Gold Price Forecast for May 2024

Very little happened in the precious metals market between the moment when I posted yesterday’s analysis and the moment when I’m writing these words.

Precisely, gold price is trading a bit lower, so there’s very little for me to add on top of what I already wrote yesterday.

There’s one thing I’ll still discuss – and that is a reply to the “where is gold likely to go before the end of May” question. And let’s move right to it.

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Gold price has more than confirmed its breakdown below the rising support line, and this, as well as the situation on the forex market (along with many other indications like silver’s short-term underperformance) suggest that gold is now going to turn south once again.

The last several days have been relatively boring as gold has been moving back and forth, but it’s something relatively normal now. Gold wants to decline, but the USD Index moved lower, so the lack of rally here is what is meaningful – and it’s a bearish thing. Once the USD Index rallies visibly again, we’ll likely see more visible declines.

How low can gold go in May?

After breakdowns, the price of a given asset tends to decline until it reaches some sort of support, after which it pauses, rebounds, and then decides what to do based on bigger trends / factors. So, the question is where’s a near support level that can trigger a rebound or a pause. The Fibonacci retracements, previous highs and lows as well as rising/declining support lines help to estimate those price levels. And when more than one technique points to a certain price level, seeing a rebound from it (or a pause) becomes even more likely.

In case of gold, we have this kind of triple support close to $2,150, so in my view this level could trigger a more visible pullback or some back and forth trading.

Those three support levels are the 50% Fibonacci retracement, the December 2023 high, and the rising red support line based on the Oct. 2023 and Feb. 2024 lows.

So, if I had to pick a level around which prices would be hovering at the end of May, I’d go with $2,160 as that’s a bit above the above-mentioned target. Gold could slide to its 50% Fibonacci retracement earlier (in 1-3 weeks), and then pause.

Of course, things can change, and I'll keep my subscribers informed.

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Thank you.

Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief