GOLD and SILVER UPDATE (12:30 pm EDST)
Yesterday gold and silver prices surged up as the Fed's dovish rhetoric kicked down the U.S. dollar. Today the precious metals may be topping at the end of a reversal zone and prices could now take a corrective dip. We have been expecting this and hoping for a new low in one of these metals (probably silver) but not the other for a case of bullish divergence and the signal of a final cycle bottom in both metals. Ideally, we want to see silver dip below $14.90 with gold remaining above $1280, but gold breaking $1280 and silver staying above $14.90 would also be an acceptable bullish buy signal. (It is also still possible that both gold and silver already started new medium-term cycles with their March 7 lows. In that case, any corrective dip now will be small). It's a little tempting to sell our gold long position here, but I think I will ride out any correction with the idea that both metals are starting or close to starting new medium-term cycles with a bullish rally just ahead. Holding my long position in gold and on the sidelines of silver for now.
Yesterday gold and silver prices surged up as the Fed's dovish rhetoric kicked down the U.S. dollar. Today the precious metals may be topping at the end of a reversal zone and prices could now take a corrective dip. We have been expecting this and hoping for a new low in one of these metals (probably silver) but not the other for a case of bullish divergence and the signal of a final cycle bottom in both metals. Ideally, we want to see silver dip below $14.90 with gold remaining above $1280, but gold breaking $1280 and silver staying above $14.90 would also be an acceptable bullish buy signal. (It is also still possible that both gold and silver already started new medium-term cycles with their March 7 lows. In that case, any corrective dip now will be small). It's a little tempting to sell our gold long position here, but I think I will ride out any correction with the idea that both metals are starting or close to starting new medium-term cycles with a bullish rally just ahead. Holding my long position in gold and on the sidelines of silver for now.
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