IMPORTANT UPDATE on GOLD and SILVER (11:30 pm EST)
Over the last two months we have been contending with erratic short-term price fluctuations in gold and silver as we try to pinpoint the end of an old medium-term cycle and the start of a new one in both of these metals. We don't want to lose sight of the "forest for the trees", however, as the longer-term picture for gold and silver continues to look very bullish. I refer readers to my Jan. 26 and Jan. 28 posts on gold, silver, and the U.S. dollar (especially relevant considering the recent exacerbation of "trade wars") where I state that:
"Gold and silver are both in the final stages of completing massive inverted "head and shoulders" chart formations that have been building since 2013.....This is a very bullish signal that is unlikely to abort as it is very near completion (especially in gold)."
Those inverted "head and shoulders" chart formations are now even closer to completion. The price fluctuations of gold and silver since early February have been confined to a narrow range and seem to be forming a strong baseline which may turn out to be the launching point for a strong rally and a "break out" of these metals to new highs. Gold has been range bound between $1309 and $1360 and silver between $16.2 and $16.8. Gold and especially silver are falling towards the bottom of those ranges as we move into the center of a reversal zone specifically relevant to precious metals (April 5 - April 13, mid-point April 10) so a reversal to the upside could be imminent.
Gold may have started a new medium-term cycle on March 1 (at $1304) and, therefore, as a new cycle could be ready to rally strongly. But even if gold breaks below $1304 to complete the bottom of an older cycle, it would likely not go lower than $1290 and would then be ready to rally strongly from there. This is why we have been holding on to our long positions in gold. If silver breaks below $16.13, it could possibly head down to $15.75, but again, like gold, it would likely be forming its cycle bottom and would be ready to rally strongly from that point.
There are several other technical signals suggesting a strong rally in these metals is imminent. The COT (Commitment of Traders) charts for silver are now very, very bullish (with the Large Specs, i.e. "dumb money", actually shorting silver - a very good sign of a bullish market). The silver/gold price ratio is also approaching a record low which likely points to both metals turning bullish soon.
We are already long in gold so we should now be looking for a good spot to go long in silver. There is a good chance we may see that next week, especially if we see bullish divergence between the two metals (i.e. one metal making a new weekly low but not the other).
Holding my long position in gold and waiting to buy silver soon.
Over the last two months we have been contending with erratic short-term price fluctuations in gold and silver as we try to pinpoint the end of an old medium-term cycle and the start of a new one in both of these metals. We don't want to lose sight of the "forest for the trees", however, as the longer-term picture for gold and silver continues to look very bullish. I refer readers to my Jan. 26 and Jan. 28 posts on gold, silver, and the U.S. dollar (especially relevant considering the recent exacerbation of "trade wars") where I state that:
"Gold and silver are both in the final stages of completing massive inverted "head and shoulders" chart formations that have been building since 2013.....This is a very bullish signal that is unlikely to abort as it is very near completion (especially in gold)."
Those inverted "head and shoulders" chart formations are now even closer to completion. The price fluctuations of gold and silver since early February have been confined to a narrow range and seem to be forming a strong baseline which may turn out to be the launching point for a strong rally and a "break out" of these metals to new highs. Gold has been range bound between $1309 and $1360 and silver between $16.2 and $16.8. Gold and especially silver are falling towards the bottom of those ranges as we move into the center of a reversal zone specifically relevant to precious metals (April 5 - April 13, mid-point April 10) so a reversal to the upside could be imminent.
Gold may have started a new medium-term cycle on March 1 (at $1304) and, therefore, as a new cycle could be ready to rally strongly. But even if gold breaks below $1304 to complete the bottom of an older cycle, it would likely not go lower than $1290 and would then be ready to rally strongly from there. This is why we have been holding on to our long positions in gold. If silver breaks below $16.13, it could possibly head down to $15.75, but again, like gold, it would likely be forming its cycle bottom and would be ready to rally strongly from that point.
There are several other technical signals suggesting a strong rally in these metals is imminent. The COT (Commitment of Traders) charts for silver are now very, very bullish (with the Large Specs, i.e. "dumb money", actually shorting silver - a very good sign of a bullish market). The silver/gold price ratio is also approaching a record low which likely points to both metals turning bullish soon.
We are already long in gold so we should now be looking for a good spot to go long in silver. There is a good chance we may see that next week, especially if we see bullish divergence between the two metals (i.e. one metal making a new weekly low but not the other).
Holding my long position in gold and waiting to buy silver soon.
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