UPDATE on GOLD, SILVER, and CRUDE OIL (10:30 pm EST)
There's a good chance gold started a new medium-term cycle with its low of $1617 on Nov. 3. The rally from that low has been strong and steep, but we should expect some corrective dip(s) anytime now. Prices hit a high at $1786 on Tuesday, and that was a "pivot point" in the center of one of our general reversal zones (Nov. 9 - 17), so a correction could be in progress. But we enter another reversal zone next week specifically for precious metals (Nov. 21 - 30). That could turn out to be the bottom of a significant correction, but if prices can edge back up above Tuesday's high, it could also be a good time frame for a new high. Our strategy here will be to wait for a significant correction to buy as this new medium-term cycle appears bullish and, we could see a significant multi-month rally to the top of this new cycle. (Any correction that goes below $1617, however, will force us to abandon this bullish outlook.)
We should note here that even if we get a multi-month rally in gold, that rally will encounter great resistance around the $1900 level, and especially around $2000 (if it gets that far), and it shouldn't exceed the long-term 23-year cycle high of $2070 (made in Aug. 2020). If it does break above there, it would mean we have already started a new 23-year cycle, but I don't think that's going to happen. Instead, I think the long-term cycle correction would resume from the top of the rally (well below $2070) and head much lower to the final bottom of the 23-year cycle (due around 2023 - 2024 near the $1000 level). But I'm projecting too far ahead here. For now, we will stay on the sidelines of gold and wait for that corrective low to buy.
Silver probably started its current medium-term cycle with its low of $17.40 on Sept. 1. This makes it older than gold's cycle. Silver rallied up to $22.38 on Tuesday and made a significant sub-cycle top before falling steeply Wednesday and today. As with gold, silver's cycle looks bullish, so we will now look for a corrective sub-cycle bottom to buy over the next several trading days. As I mentioned above, we enter a reversal zone specifically for gold and silver next week, so that would be a good time for a bottom to form. Silver has the potential right now to rally as high as $30 (maybe even higher). We will watch carefully over the next several days for a good spot to buy. If prices drop TOO low (i.e. close to or below $17.40, we would have to give up this bullish view. We remain on the sidelines of silver for now.
We still don't know if crude oil started a new medium-term cycle on Sept. 26 at $75.70 (Dec. contract chart) or on Aug. 16 at $84.75. If the former, the cycle is bullish; if the latter, it is bearish because prices have already gone below the start of the cycle. In both cases, a sub-cycle top formed with the Nov. 7 high at $93.74, and a corrective drop is in progress. This market's trend is not clear at the moment. A break above $93.74 would make it bullish but a break below $75.70 would make it bearish and susceptible to a drop as low as $65. We are in a wide reversal zone specifically for crude that runs from Nov. 11 - Dec. 1 with potential "pivot points" around Nov.17 (today) and Nov. 25 (the day after the Thanksgiving holiday in the U.S.). We could therefore get a significant low and/or high anytime through the rest of this month. We will remain on the sidelines of crude for now until the cycles and short-term trend are more definitive.
There's a good chance gold started a new medium-term cycle with its low of $1617 on Nov. 3. The rally from that low has been strong and steep, but we should expect some corrective dip(s) anytime now. Prices hit a high at $1786 on Tuesday, and that was a "pivot point" in the center of one of our general reversal zones (Nov. 9 - 17), so a correction could be in progress. But we enter another reversal zone next week specifically for precious metals (Nov. 21 - 30). That could turn out to be the bottom of a significant correction, but if prices can edge back up above Tuesday's high, it could also be a good time frame for a new high. Our strategy here will be to wait for a significant correction to buy as this new medium-term cycle appears bullish and, we could see a significant multi-month rally to the top of this new cycle. (Any correction that goes below $1617, however, will force us to abandon this bullish outlook.)
We should note here that even if we get a multi-month rally in gold, that rally will encounter great resistance around the $1900 level, and especially around $2000 (if it gets that far), and it shouldn't exceed the long-term 23-year cycle high of $2070 (made in Aug. 2020). If it does break above there, it would mean we have already started a new 23-year cycle, but I don't think that's going to happen. Instead, I think the long-term cycle correction would resume from the top of the rally (well below $2070) and head much lower to the final bottom of the 23-year cycle (due around 2023 - 2024 near the $1000 level). But I'm projecting too far ahead here. For now, we will stay on the sidelines of gold and wait for that corrective low to buy.
Silver probably started its current medium-term cycle with its low of $17.40 on Sept. 1. This makes it older than gold's cycle. Silver rallied up to $22.38 on Tuesday and made a significant sub-cycle top before falling steeply Wednesday and today. As with gold, silver's cycle looks bullish, so we will now look for a corrective sub-cycle bottom to buy over the next several trading days. As I mentioned above, we enter a reversal zone specifically for gold and silver next week, so that would be a good time for a bottom to form. Silver has the potential right now to rally as high as $30 (maybe even higher). We will watch carefully over the next several days for a good spot to buy. If prices drop TOO low (i.e. close to or below $17.40, we would have to give up this bullish view. We remain on the sidelines of silver for now.
We still don't know if crude oil started a new medium-term cycle on Sept. 26 at $75.70 (Dec. contract chart) or on Aug. 16 at $84.75. If the former, the cycle is bullish; if the latter, it is bearish because prices have already gone below the start of the cycle. In both cases, a sub-cycle top formed with the Nov. 7 high at $93.74, and a corrective drop is in progress. This market's trend is not clear at the moment. A break above $93.74 would make it bullish but a break below $75.70 would make it bearish and susceptible to a drop as low as $65. We are in a wide reversal zone specifically for crude that runs from Nov. 11 - Dec. 1 with potential "pivot points" around Nov.17 (today) and Nov. 25 (the day after the Thanksgiving holiday in the U.S.). We could therefore get a significant low and/or high anytime through the rest of this month. We will remain on the sidelines of crude for now until the cycles and short-term trend are more definitive.
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