On December 27, 2016, NIA predicted with gold at $1,132 per oz that it was about to make an explosive short-term rally of $78 per oz to $1,210 per oz! Today, gold surpassed NIA’s short-term forecast of $1,210 per oz and reached a high of $1,219 per oz!
NIA was 100% correct! Gold has made an explosive rally of $87 per oz in only 13 trading days!
Once again, NIA’s proprietary gold short-term fundamental analysis system has proven itself to be the world’s #1 most accurate leading indicator for forecasting the short-term price movements of gold!
Since NIA’s December 27th report, the fundamentals of gold have continued to strengthen. The forward 24-month Federal Funds Rate has declined by 10 basis points vs. the forward 5-year price inflation rate declining only 1 basis point – for an overall gold fundamental improvement of 9 basis points!
With the difference between the forward 5-year price inflation rate minus the forward 24-month Fed Funds Rate rising by 9 basis points to 29 basis points, gold’s short-term fundamental fair value has increased since December 27th by $19 per oz to a current level of $1,229 per oz!
Since 2010, NIA’s exclusive one-of-a-kind gold undervalued/overvalued ratio has ranged from a low of -0.83 to a high of 1.29, with the normal fair value trading range for gold being -0.26 to 0.37. Gold becomes undervalued when NIA’s indicator declines below -0.26 and extremely undervalued when it declines below -0.45. Gold becomes overvalued when NIA’s indicator rises above 0.37 and extremely overvalued when it rises above 0.62. After falling in late-December to an extremely undervalued -0.47, NIA’s ratio is currently back within its fair value range at -0.08.
Based on the historical range since 2010 of NIA’s gold undervalued/overvalued ratio, gold currently has a short-term fair value of $1,228.58 per oz with short-term upside potential of $1,474.06 per oz and short-term downside risk of $1,071.80 per oz.