UPDATES ON GOLD, SILVER, CRUDE OIL and the U.S. DOLLAR INDEX (7:30 pm EDT)
Gold's current medium-term cycle (which began with the low of $1807 on Feb. 28) has recently developed a slightly bearish trend. It is also getting old. This means it likely peaked with its $2059 high on May 4 and is now moving down to its final corrective bottom due anytime now over the next 5 weeks. It's possible that last week's low at $1928 was the bottom already as that was inside our reversal zone specifically for gold and silver (which ends today). If so, prices could rally strongly from here. If last week wasn't the bottom, prices could continue lower into our next reversal zone for these metals coming up June 26 - July 5. That would also be a good time frame for the final cycle bottom. If prices do go lower, we don't want to see them go below $1807 as that would turn gold's general trend very bearish.
As I've stated in recent blogs, there is a strong possibility that the long-term (23 year) cycle in gold (which I describe on this website's Home Page) could have bottomed on Sept. 28, 2022 at $1616. If that's the case, gold could be very bullish now and ready to make new highs beyond the all-time high of $2070. But if Sept. 28 didn't end the 23 year cycle, then that cycle is due to bottom next year close to $1000. So how do we know if this is a new or old 23 year cycle? If the current medium-term cycle (as described above) ends soon (if it hasn't already with last week's low) and the new one can rally well above $2070, we will assume a new 23 year cycle has started. On the other hand, if gold prices move lower and break below $1807, it will signify that the older 23 year cycle is still in place and prices will likely fall much lower into next year.
So the reader can see that we are at a significant crossroads in the long-term cycle in gold. I slightly favor the bullish view that a new 23 year cycle has already started. Therefore, we will be looking for another low spot to buy in next week's new reversal zone for the precious metals as long as prices remain well above $1807. If gold rallies this week into next, we will stay on the sidelines as a top could form in that new reversal zone, and we would want to wait and see what sort of correction would follow. We remain on the sidelines of gold for now.
Silver's current medium-term cycle began with its low of $19.90 on March 10, and this cycle is also getting old. Silver made a significant top on May 5 at $26.12 followed by a significant sub-cycle correction on May 26 at $22.69. It's possible that May 26 low could have been the final bottom to the medium-term cycle (although it would have been a little early). If so, silver could be very bullish now. However, I think it's more likely that we are still in an older cycle that is due to bottom anytime over the next six weeks. As with gold, next week's new reversal zone for the precious metals would be a good time for the final bottom, and that could turn out to be a good spot to buy (as long as prices remain above $20). If instead silver ends up rallying this week into that new reversal zone next week, we will stay on the sidelines. Any top forming in the new reversal zone could be followed by a significant correction down. We remain on the sidelines of silver for now.
There is a strong support line for the U.S. Dollar Index around 102, and that is now being tested. Any bounce in the greenback up from this support would put downward pressure on the precious metals.
Crude oil prices continue to remain range-bound between $67 and $75 (July contract chart). We are now at the center of a reversal zone specifically for crude (June 13 - 22) and prices have been rallying from last week to a new high today at $72.02. A reversal back down could be imminent. Prices are now between the 15-day and 45-day moving averages. A sharp reversal down could send them back down below both again.
The cycle labeling of crude is still not clear. We don't know if the current medium-term cycle began on March 20 at $64.66 or May 4 at $63.89. If the cycle began March 20, it has turned bearish because it has already dipped below that starting low. Either way, a sub-cycle low is due this week or next (if it didn't already happen last Monday). Any new low now that falls below $63.89 will turn crude bearish, regardless of which cycle is in place, and prices could be on their way down to the $55 - $ 58 area. If we get a top this week and prices fall into next week's strong general reversal zone for all markets (June 26 - July 5) and remain above $65, we may look to buy. For now, we remain on the sidelines of crude oil.
Gold's current medium-term cycle (which began with the low of $1807 on Feb. 28) has recently developed a slightly bearish trend. It is also getting old. This means it likely peaked with its $2059 high on May 4 and is now moving down to its final corrective bottom due anytime now over the next 5 weeks. It's possible that last week's low at $1928 was the bottom already as that was inside our reversal zone specifically for gold and silver (which ends today). If so, prices could rally strongly from here. If last week wasn't the bottom, prices could continue lower into our next reversal zone for these metals coming up June 26 - July 5. That would also be a good time frame for the final cycle bottom. If prices do go lower, we don't want to see them go below $1807 as that would turn gold's general trend very bearish.
As I've stated in recent blogs, there is a strong possibility that the long-term (23 year) cycle in gold (which I describe on this website's Home Page) could have bottomed on Sept. 28, 2022 at $1616. If that's the case, gold could be very bullish now and ready to make new highs beyond the all-time high of $2070. But if Sept. 28 didn't end the 23 year cycle, then that cycle is due to bottom next year close to $1000. So how do we know if this is a new or old 23 year cycle? If the current medium-term cycle (as described above) ends soon (if it hasn't already with last week's low) and the new one can rally well above $2070, we will assume a new 23 year cycle has started. On the other hand, if gold prices move lower and break below $1807, it will signify that the older 23 year cycle is still in place and prices will likely fall much lower into next year.
So the reader can see that we are at a significant crossroads in the long-term cycle in gold. I slightly favor the bullish view that a new 23 year cycle has already started. Therefore, we will be looking for another low spot to buy in next week's new reversal zone for the precious metals as long as prices remain well above $1807. If gold rallies this week into next, we will stay on the sidelines as a top could form in that new reversal zone, and we would want to wait and see what sort of correction would follow. We remain on the sidelines of gold for now.
Silver's current medium-term cycle began with its low of $19.90 on March 10, and this cycle is also getting old. Silver made a significant top on May 5 at $26.12 followed by a significant sub-cycle correction on May 26 at $22.69. It's possible that May 26 low could have been the final bottom to the medium-term cycle (although it would have been a little early). If so, silver could be very bullish now. However, I think it's more likely that we are still in an older cycle that is due to bottom anytime over the next six weeks. As with gold, next week's new reversal zone for the precious metals would be a good time for the final bottom, and that could turn out to be a good spot to buy (as long as prices remain above $20). If instead silver ends up rallying this week into that new reversal zone next week, we will stay on the sidelines. Any top forming in the new reversal zone could be followed by a significant correction down. We remain on the sidelines of silver for now.
There is a strong support line for the U.S. Dollar Index around 102, and that is now being tested. Any bounce in the greenback up from this support would put downward pressure on the precious metals.
Crude oil prices continue to remain range-bound between $67 and $75 (July contract chart). We are now at the center of a reversal zone specifically for crude (June 13 - 22) and prices have been rallying from last week to a new high today at $72.02. A reversal back down could be imminent. Prices are now between the 15-day and 45-day moving averages. A sharp reversal down could send them back down below both again.
The cycle labeling of crude is still not clear. We don't know if the current medium-term cycle began on March 20 at $64.66 or May 4 at $63.89. If the cycle began March 20, it has turned bearish because it has already dipped below that starting low. Either way, a sub-cycle low is due this week or next (if it didn't already happen last Monday). Any new low now that falls below $63.89 will turn crude bearish, regardless of which cycle is in place, and prices could be on their way down to the $55 - $ 58 area. If we get a top this week and prices fall into next week's strong general reversal zone for all markets (June 26 - July 5) and remain above $65, we may look to buy. For now, we remain on the sidelines of crude oil.
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