The Alternative Investor
  • Home
  • TRADING BLOG
  • Current Positions
  • Alternative Investor Strategy
  • ETFs
  • About Alternative Investor
  • Contact

Trading Blog          Tuesday,  August 21,  2018

8/21/2018

 
UPDATE ON THE PRECIOUS METALS MARKET  (4:30 pm EDST)

The precious metals market continues to be very difficult to call due to currently ambiguous cycle patterns in the charts of both silver and gold as well as mixed bullish and bearish technical signals also manifesting in these charts. Not surprisingly, several of the analysts I follow closely and respect are also stating different opinions about where these metals are heading short-term and medium-term (although their longer-term views are mostly bullish).

As I stated in yesterday's blog, last week's lows in both gold and silver ($1162 and $14.65, respectively) could have been a significant medium-term cycle bottom (and possibly a longer-term bottom as well), and both metals could be starting a significant rally now. But these metals are also pushing higher into the center of this week's reversal zone which means they could suddenly reverse back down and take several more weeks (or more) to find their final cycle bottoms. COT (Commitment of Traders) charts are quite bullish right now for both gold and silver, and this supports a rally; however, other technical signals look quite bearish for gold and especially silver. One way to interpret these contradictory signals would be a short-term rally that would exhaust itself early and then turn south. The question then becomes whether or not it is worth going long for this rally. If one metal can make a new low without the other (bullish divergence) by next Wednesday (the end of the reversal zone), it may be worth going long. Otherwise, I think I'll remain on the sidelines and wait for lower lows and a possible cycle bottom in late September.

The U.S. Dollar Index may help us gauge the movements of gold and silver this week. The dollar recently "broke out" and through a strong resistance line at 95 and touched 96.78 last Tuesday. Over the last several days it has fallen back to that 95 area. There is support there as well as at 94.5 and then 94. If the dollar pushes a bit lower to one of these supports, gold and silver could rally a bit more. But we need to note that we are now in a reversal zone for currencies (Aug. 21 - 29) so the greenback could find support over the next several days and then reverse back up, sending gold and silver prices back down. Another possible (but unlikely) scenario that would be bullish for precious metals would be to see the dollar break and close below 94. That could signal the start of a breakdown in the U.S. dollar. This is unlikely to happen, though, as the new Federal Reserve Chairman Jerome Powell appears hawkish and intent on raising interest rates.

The purpose of this update is not to confuse or frustrate traders but to hopefully give more insight into this market and help readers understand why I am remaining on the sidelines.







Comments are closed.

    RSS Feed

    Archives

    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012

The Alternative Investor takes no advertising or incentives from any company, institution or investment that is discussed on the website.  Any trading and investing information presented is based on Alternative Investor's independent and unbiased research and analysis of current financial markets.

                                                                                                                                                            LEGAL and DISCLAIMER

All statements and trading/investment information on this website represent solely the personal opinion of The Alternative Investor based on information available at the time of writing and are intended for educational purposes only and are not a recommendation to buy or sell securities, commodities or currencies.  The Alternative Investor is not a licensed broker or financial advisor.  The Alternative Investor presents the trading and investing information on this site in good faith based on his own research into current financial markets but cannot and does not guarantee profit and does not guarantee against any financial losses that result from using this information.  All users of this website and the information presented within it assume full responsibility for their own personal trading/investing decisions and any losses that may result from them.

Trading and investing in any financial market may involve serious risk of loss.  For this reason all traders and investors should never place more money than they can afford to lose in any individual market.  The Alternative Investor monitors several markets and encourages a balanced distribution of funds among them (and others).  The Alternative Investor recommends consulting with a professional financial advisor before making any transactions with financial ramifications.  All trading, investing and financial transactions should always be made in accordance with the appropriate laws and legal regulations in your area of jurisdiction.

The Alternative Investor is an independent researcher and analyst and receives no compensation of any kind from any individuals, groups, companies or institutions discussed on this website.