UPDATES on GOLD, SILVER and the U.S. DOLLAR INDEX (6:00 pm EST)
Gold and silver are a bit tricky to trade right now. Gold broke dramatically to a new all-time high ($2123) two weeks ago, and this confirmed the idea that gold began a new longer-term (at least 8-year) cycle with its low of $1616 on Sept. 28, 2022. Because this long-term cycle is young, gold prices should now be bullish into late 2024 and could eventually get into the $2500 - $2900 range.
For now, however. we will focus on the current medium-term cycle in gold (which began on Oct. 6) as we note that prices corrected back down from that Dec. 4 all-time high of $2123 and made a low last Wednesday at $1974. Prices snapped back up from that low on Thursday, but they seem to have faltered a bit Friday and today. Last Wednesday's low could be a significant sub-cycle bottom (it happened early inside two reversal zones). If so, we could see prices rally to challenge the Dec. 4 all-time high ($2123). If that happens, we will stay on the sidelines and wait for the current medium-term cycle to peak (possibly between $2100 - $2150) and then look to buy when the cycle makes its final bottom (due around mid-Jan. through Feb.). If instead of rallying, gold prices fall now and stabilize close to $1900. we would consider going long, especially if that low happens this week or early next week. The bottom line is that we want to buy any deep corrections in gold that approach $1900 or even fall a little below (say to $1860 - but not below $1812).
Silver's current medium-term cycle is similar to gold's. It began on Oct. 3, and it may have made a significant sub-cycle low ($22.52) last week, but we wanted to see that low closer to $22 or even a bit below before buying. It may drop lower this week, and if it does, we will consider going long for a rally back up to $25 - $26. After that rally, silver will likely take a deep correction down, at least to the $21 level and at least into the middle of next year. As long as prices stay above $14.50, we could see another rally from this deep bottom back up to challenge the $30 high from 2021 (but that would happen late next year, and I am getting way ahead of myself here).
For now, let's remain on the sidelines of both gold and silver.
Today is the last day of a reversal zone specifically for currencies, and the U.S. Dollar Index may be finding a support line around 102. If the greenback can stage a rally from here, it could put downward pressure on the precious metals. If this index breaks lower, however, it could help push these metals higher. We will watch this over the next few days.
Gold and silver are a bit tricky to trade right now. Gold broke dramatically to a new all-time high ($2123) two weeks ago, and this confirmed the idea that gold began a new longer-term (at least 8-year) cycle with its low of $1616 on Sept. 28, 2022. Because this long-term cycle is young, gold prices should now be bullish into late 2024 and could eventually get into the $2500 - $2900 range.
For now, however. we will focus on the current medium-term cycle in gold (which began on Oct. 6) as we note that prices corrected back down from that Dec. 4 all-time high of $2123 and made a low last Wednesday at $1974. Prices snapped back up from that low on Thursday, but they seem to have faltered a bit Friday and today. Last Wednesday's low could be a significant sub-cycle bottom (it happened early inside two reversal zones). If so, we could see prices rally to challenge the Dec. 4 all-time high ($2123). If that happens, we will stay on the sidelines and wait for the current medium-term cycle to peak (possibly between $2100 - $2150) and then look to buy when the cycle makes its final bottom (due around mid-Jan. through Feb.). If instead of rallying, gold prices fall now and stabilize close to $1900. we would consider going long, especially if that low happens this week or early next week. The bottom line is that we want to buy any deep corrections in gold that approach $1900 or even fall a little below (say to $1860 - but not below $1812).
Silver's current medium-term cycle is similar to gold's. It began on Oct. 3, and it may have made a significant sub-cycle low ($22.52) last week, but we wanted to see that low closer to $22 or even a bit below before buying. It may drop lower this week, and if it does, we will consider going long for a rally back up to $25 - $26. After that rally, silver will likely take a deep correction down, at least to the $21 level and at least into the middle of next year. As long as prices stay above $14.50, we could see another rally from this deep bottom back up to challenge the $30 high from 2021 (but that would happen late next year, and I am getting way ahead of myself here).
For now, let's remain on the sidelines of both gold and silver.
Today is the last day of a reversal zone specifically for currencies, and the U.S. Dollar Index may be finding a support line around 102. If the greenback can stage a rally from here, it could put downward pressure on the precious metals. If this index breaks lower, however, it could help push these metals higher. We will watch this over the next few days.
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