Gold prices are cheap in the face of unprecedented and coordinated global quantitative easing among central banks. However, if the Fed makes good on its promise to gradually raise interest rates, then gold prices might get even cheaper. Once some semblance of supply-demand equilibrium can be restored to the energy markets to stabilize oil prices, this removes a major stumbling block for the Fed's targeted 2% inflation rate. Another 2 or 3 bumps in increments of 25 bps by the FOMC over the next 9-12 months and the party is on for gold bears. A 61.8% Fibonacci retracement takes the yellow metal from 1050 to 891.

Just something to consider…