UPDATES ON GOLD, SILVER, AND CRUDE OIL (11:30 pm EDST) [MONTHLY OVERVIEW]
We are still holding the view that gold's long-term 23 year cycle topped out with the double-top highs of $2070 in August 2020 and $2066 in March 2022. This means that gold has already started its final correction down to this cycle's final bottom (due around 2023-2024 near $1000). But, as with the broad stock market, there could be significant corrective rallies along the way, and we may be seeing a set-up for one right now.
We had been thinking that the $1681 low on July 21 was a significant bottom from which a strong corrective rally should have followed. Instead, we saw a modest rally that peaked with the August 10 high of $1805. From that peak, prices fell, and they made a new low on September 28 at $1616. Prices then rallied sharply from this new low, so that could be the significant sub-cycle low we have been waiting for. We move into a reversal zone specifically for the precious metals next week (Oct. 18 - 28). If that low at $1616 can hold into next week's reversal zone, we could see another bottom and the start of a new medium-term cycle with a strong multi-month rally that could take prices back to $1850 or even higher. We don't expect any rally to take out those double-top highs around $2066 - $2070, but if that should happen (anything seems possible these days), we would have to change our labeling of the 23-year long-term cycle. For now, we may look to buy into this potentially strong rally, but we would plan on changing to a short position after a good rally to a sub-cycle top significantly below $2066- $2070.
It looks like silver likely started a new medium-term cycle (and possibly a longer-term 26-month cycle) with its low of $17.59 on Sept. 1. If that's true, silver could be very bullish now. The steep fall from the Oct. 4 high at $21.22 could be a deep sub-cycle correction now ending as we enter this new reversal zone for both gold and silver next week. As long as prices stay above $17.59, a strong rally could be imminent. This rally should get at least to $24, but it could even go as high $30.
We will look for a buying opportunity in both metals next week with a stop loss based on BOTH gold and silver breaking and closing below their lows of September (that would be $1616 for gold and $17.59 in silver). We are on the sidelines of both these metals for now.
Crude oil's current medium-term cycle is not very clear at the moment. It could be either very bullish or very bearish (not very helpful, I know). But crude's longer-term cycles are bullish (e.g. it is VERY early in a new 18 year cycle in crude that began with that generational low - near zero $/barrel - that happened in April 2020), so we should anticipate higher prices for many more years. As with all cycles, there are significant corrective drops, even in bull markets, and crude's price drop this year from June through September has been one of them. This longer-term sub-cycle correction MAY be over with that Sept. 23 low at $76.25 (Nov. contract chart), or it could push even lower into two back to back reversal zones specifically for crude in November (Nov. 8 - 30). Right now, short-term signals are looking bearish. Any break below $76.25 would definitely be bearish and point prices down to $65 or even lower. Last week prices broke below a downward trend-line that is now around $86.60 and falling. Prices need to start closing above there to look bullish, and then above $93.64 to support the idea that a new bullish cycle began on Sept. 23. We will stay on the sidelines of this market for now.
We are still holding the view that gold's long-term 23 year cycle topped out with the double-top highs of $2070 in August 2020 and $2066 in March 2022. This means that gold has already started its final correction down to this cycle's final bottom (due around 2023-2024 near $1000). But, as with the broad stock market, there could be significant corrective rallies along the way, and we may be seeing a set-up for one right now.
We had been thinking that the $1681 low on July 21 was a significant bottom from which a strong corrective rally should have followed. Instead, we saw a modest rally that peaked with the August 10 high of $1805. From that peak, prices fell, and they made a new low on September 28 at $1616. Prices then rallied sharply from this new low, so that could be the significant sub-cycle low we have been waiting for. We move into a reversal zone specifically for the precious metals next week (Oct. 18 - 28). If that low at $1616 can hold into next week's reversal zone, we could see another bottom and the start of a new medium-term cycle with a strong multi-month rally that could take prices back to $1850 or even higher. We don't expect any rally to take out those double-top highs around $2066 - $2070, but if that should happen (anything seems possible these days), we would have to change our labeling of the 23-year long-term cycle. For now, we may look to buy into this potentially strong rally, but we would plan on changing to a short position after a good rally to a sub-cycle top significantly below $2066- $2070.
It looks like silver likely started a new medium-term cycle (and possibly a longer-term 26-month cycle) with its low of $17.59 on Sept. 1. If that's true, silver could be very bullish now. The steep fall from the Oct. 4 high at $21.22 could be a deep sub-cycle correction now ending as we enter this new reversal zone for both gold and silver next week. As long as prices stay above $17.59, a strong rally could be imminent. This rally should get at least to $24, but it could even go as high $30.
We will look for a buying opportunity in both metals next week with a stop loss based on BOTH gold and silver breaking and closing below their lows of September (that would be $1616 for gold and $17.59 in silver). We are on the sidelines of both these metals for now.
Crude oil's current medium-term cycle is not very clear at the moment. It could be either very bullish or very bearish (not very helpful, I know). But crude's longer-term cycles are bullish (e.g. it is VERY early in a new 18 year cycle in crude that began with that generational low - near zero $/barrel - that happened in April 2020), so we should anticipate higher prices for many more years. As with all cycles, there are significant corrective drops, even in bull markets, and crude's price drop this year from June through September has been one of them. This longer-term sub-cycle correction MAY be over with that Sept. 23 low at $76.25 (Nov. contract chart), or it could push even lower into two back to back reversal zones specifically for crude in November (Nov. 8 - 30). Right now, short-term signals are looking bearish. Any break below $76.25 would definitely be bearish and point prices down to $65 or even lower. Last week prices broke below a downward trend-line that is now around $86.60 and falling. Prices need to start closing above there to look bullish, and then above $93.64 to support the idea that a new bullish cycle began on Sept. 23. We will stay on the sidelines of this market for now.
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