In putting together my own analysis of financial markets, I follow a handful of financial analysts whom I respect greatly and who usually agree, in broad terms, on the general condition and direction of specific markets. This frequent agreement is a good sign they are on the right track as they are all quite diverse in their backgrounds and in the methodologies and techniques they use to predict market movements. Over the last several years, however, there seems to be some disagreement on the course of the precious metals gold and silver. On the positive side (at least for gold bulls), all of them seem to agree that there is a long-term cycle (around 20 years) in both metals that is due to bottom relatively soon. When this low is in, it will be a "golden opportunity" to buy gold and silver for a bullish run that could last many years and take prices to new all-time highs. The difference of opinion here is that some analysts believe that long-term low is happening now (or has already happened with the $1045 low in gold in December 2015) while others feel it is coming five to seven years from now and gold will go lower than $1045 (perhaps to the $700 area). I had been leaning towards the idea of gold's long-term cycle bottom being that $1045 low from 2015, but recently the precious metals market has been showing signs of breaking down.
Those who read this blog regularly will recall my recent discussion of the near completion of giant inverted "head and shoulders" chart patterns forming in both gold and silver since 2013. This kind of pattern is an extremely bullish signal, but, like all chart patterns, it can abort and break down if bearish forces take over. We may be seeing that now (see my June 17 blog on gold and silver). A strong signal pointing to lower gold prices over the next several years would be to see gold break and close below $1045. A close below $1125 or even $1200 would also not be a good sign (we are getting close to $1200). It should become more clear over the next month or two if gold's long-term cycle is going lower.
Shorter-term, both gold and silver may have made significant bottoms last week (gold at $1212 and silver at $15.18), and we could see prices rally significantly now into the end of this week (possibly due to President Trump's criticism of the Fed's plan to continue raising interest rates, a critique that depressed the U. S. dollar last week and boosted precious metal prices). The following week starts another reversal zone for these metals (July 30 - August 7) so a strong rally into that time could set up a shorting opportunity. If we don't get a strong rally, we may just wait to buy a medium-term cycle bottom (as long as prices don't go too low) in one or both metals which could be coming up near the end of August. Currently on the sidelines of both metals.