IMPORTANT UPDATES on PRECIOUS METALS and CRUDE OIL (3:30 pm EST)
Gold and silver, traditionally used to hedge against equity downturns, fell heavily last week with the broad stock market. This suggests that frightened investors are selling everything in a panic being triggered by the coronavirus epidemic. This bailing out of equities AND commodities is similar to what happened in the 2008 - 2009 crash when investors and traders fled to the perceived safety of the U.S. Dollar. (Interestingly, the U.S. Dollar Index has also been falling, but it is approaching a support line around 97 which could serve as a platform for a bounce).
We are most likely nearing the end of the current medium-term cycles in both metals, but the final corrective bottoms may not come for several more weeks. In the meantime, we may see a bounce from last week's lows; however, there is a reversal zone coming up specifically for gold and silver March 4 - 12. Any rally into that time frame could see a top and a reversal back down. Or prices could just continue down into the reversal period (this Wednesday through next Thursday). The bottom line here is that we want to watch for the final cycle bottoms as a POSSIBLE spot to buy. Those bottoms may come in this reversal zone, or they may come later this month. We will watch these prices carefully now for the signs of a bottom.
Last week's plunge in precious metal prices along with the broad stock market is a bearish warning that gold and silver could be taken down by a severe corrective plunge in equities (which now looks very possible). This means we MAY have to abandon our previously held idea that gold (and silver) prices might rally soon to new all-time highs (a possible "blowoff") before falling back to complete a 23 year cycle bottom (see GOLD Update 9/2/19 on the Home Page). COT (Commitment of Traders) charts for both metals are also strongly bearish now which is suggesting lower prices ahead. Gold breaking and closing below $1520 would be a negative sign. Silver closing below $16 would also not be good.
We are out of both gold and silver for now.
It appears that crude oil did not start a new medium-term cycle on Feb. 4 but is instead completing and older cycle with prices moving down to that cycle's final corrective bottom. We enter a reversal zone specifically for crude oil this Thursday (March 4 - 12) so that would be an ideal time for a bottom. Prices around $40 - $41 would be a good target for the bottom. That may be a good spot to buy. On the sidelines of crude for now.
Gold and silver, traditionally used to hedge against equity downturns, fell heavily last week with the broad stock market. This suggests that frightened investors are selling everything in a panic being triggered by the coronavirus epidemic. This bailing out of equities AND commodities is similar to what happened in the 2008 - 2009 crash when investors and traders fled to the perceived safety of the U.S. Dollar. (Interestingly, the U.S. Dollar Index has also been falling, but it is approaching a support line around 97 which could serve as a platform for a bounce).
We are most likely nearing the end of the current medium-term cycles in both metals, but the final corrective bottoms may not come for several more weeks. In the meantime, we may see a bounce from last week's lows; however, there is a reversal zone coming up specifically for gold and silver March 4 - 12. Any rally into that time frame could see a top and a reversal back down. Or prices could just continue down into the reversal period (this Wednesday through next Thursday). The bottom line here is that we want to watch for the final cycle bottoms as a POSSIBLE spot to buy. Those bottoms may come in this reversal zone, or they may come later this month. We will watch these prices carefully now for the signs of a bottom.
Last week's plunge in precious metal prices along with the broad stock market is a bearish warning that gold and silver could be taken down by a severe corrective plunge in equities (which now looks very possible). This means we MAY have to abandon our previously held idea that gold (and silver) prices might rally soon to new all-time highs (a possible "blowoff") before falling back to complete a 23 year cycle bottom (see GOLD Update 9/2/19 on the Home Page). COT (Commitment of Traders) charts for both metals are also strongly bearish now which is suggesting lower prices ahead. Gold breaking and closing below $1520 would be a negative sign. Silver closing below $16 would also not be good.
We are out of both gold and silver for now.
It appears that crude oil did not start a new medium-term cycle on Feb. 4 but is instead completing and older cycle with prices moving down to that cycle's final corrective bottom. We enter a reversal zone specifically for crude oil this Thursday (March 4 - 12) so that would be an ideal time for a bottom. Prices around $40 - $41 would be a good target for the bottom. That may be a good spot to buy. On the sidelines of crude for now.
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