IMPORTANT UPDATE on GOLD and SILVER (10:30 pm EST)
It still looks as if the current medium-term cycles in both gold and silver started on Sept. 24 (at $1849 in gold and $21.75 in silver). On Nov. 24, I wrote:
"Gold has fallen below its Sept. 24 low which means gold's cycle has turned bearish. Silver, however, is still above its Sept. 24 low and could still be bullish. We thus have a bullish divergence signal as we enter our new reversal zone (Nov. 24 - Dec. 1). This means we should be watching for some sort of bottom this week or early next week."
Both metals did fall to new lows and a bottom on Nov. 30 - gold to $1766 and silver to $21.90 - and prices have been rising sharply from there. Note that silver's new low did not go below its Sept. 24 low ($21.75), which was a bullish divergence signal to gold as the yellow metal pushed well below its Sept. 24 low of $1849.
OK. We've established that gold's medium-term cycle has turned bearish. That means that the current rally should not exceed the recent high of $1965 (Nov. 9) before turning down again and falling to a final bottom below $1766 four to ten weeks from now. But silver's medium-term cycle COULD be bullish. If that's the case, silver's current rally could easily exceed its Nov. 9 high of $25.96 before its final corrective drop to its cycle bottom (two to ten weeks from now). Silver exceeding its Nov. 9 high and gold staying below its Nov. 9 high would be an ideal bearish divergence signal and could be a good opportunity to sell the metals short, if it happens.
There is a SLIGHT chance that gold began a new medium-term cycle with last week's low ($1766 on Nov. 30). If it did, it would mean that gold is very bullish and could easily rally now to break that $1965 Nov. 9 high. Silver would more than likely also rally strongly in that situation. For now, I am betting on a more bearish scenario, but if gold breaks that $1965 high, I will have to change my view.
Longer-term, we are still anticipating the FINAL top in the 23 YEAR cycle in gold that began in 1999 (see Home Page gold updates). That top is due ANYTIME now, and it may have already happened with gold's August high at $2070. The question now is whether or not gold (with silver) will have a "blow-off" top above $2070 before turning down for its final steep and deep correction to the 23 year cycle bottom. That final 23 year bottom is due around 2023-2024 and could be quite low depending on the height of the final top (a "blow-off" top could also go quite high).
The reader can appreciate from all this that gold is tricky to call right now. While we want to have a short position when gold takes its final long-term correction down to its 23 year cycle bottom, we don't want to be caught in our "shorts" (pun intended) if gold has a "blow-off" rally. We may thus do short-term trading until we can be more certain that the final 23 year cycle top is in. And by the way, once the final 23 year cycle BOTTOM is in (circa 2023 - 2024), it will be a "golden opportunity" to buy for everyone. This will be especially true for long-term traders as it will be the start of a new 23 year cycle.
We are still on the sidelines of gold and silver for now.
It still looks as if the current medium-term cycles in both gold and silver started on Sept. 24 (at $1849 in gold and $21.75 in silver). On Nov. 24, I wrote:
"Gold has fallen below its Sept. 24 low which means gold's cycle has turned bearish. Silver, however, is still above its Sept. 24 low and could still be bullish. We thus have a bullish divergence signal as we enter our new reversal zone (Nov. 24 - Dec. 1). This means we should be watching for some sort of bottom this week or early next week."
Both metals did fall to new lows and a bottom on Nov. 30 - gold to $1766 and silver to $21.90 - and prices have been rising sharply from there. Note that silver's new low did not go below its Sept. 24 low ($21.75), which was a bullish divergence signal to gold as the yellow metal pushed well below its Sept. 24 low of $1849.
OK. We've established that gold's medium-term cycle has turned bearish. That means that the current rally should not exceed the recent high of $1965 (Nov. 9) before turning down again and falling to a final bottom below $1766 four to ten weeks from now. But silver's medium-term cycle COULD be bullish. If that's the case, silver's current rally could easily exceed its Nov. 9 high of $25.96 before its final corrective drop to its cycle bottom (two to ten weeks from now). Silver exceeding its Nov. 9 high and gold staying below its Nov. 9 high would be an ideal bearish divergence signal and could be a good opportunity to sell the metals short, if it happens.
There is a SLIGHT chance that gold began a new medium-term cycle with last week's low ($1766 on Nov. 30). If it did, it would mean that gold is very bullish and could easily rally now to break that $1965 Nov. 9 high. Silver would more than likely also rally strongly in that situation. For now, I am betting on a more bearish scenario, but if gold breaks that $1965 high, I will have to change my view.
Longer-term, we are still anticipating the FINAL top in the 23 YEAR cycle in gold that began in 1999 (see Home Page gold updates). That top is due ANYTIME now, and it may have already happened with gold's August high at $2070. The question now is whether or not gold (with silver) will have a "blow-off" top above $2070 before turning down for its final steep and deep correction to the 23 year cycle bottom. That final 23 year bottom is due around 2023-2024 and could be quite low depending on the height of the final top (a "blow-off" top could also go quite high).
The reader can appreciate from all this that gold is tricky to call right now. While we want to have a short position when gold takes its final long-term correction down to its 23 year cycle bottom, we don't want to be caught in our "shorts" (pun intended) if gold has a "blow-off" rally. We may thus do short-term trading until we can be more certain that the final 23 year cycle top is in. And by the way, once the final 23 year cycle BOTTOM is in (circa 2023 - 2024), it will be a "golden opportunity" to buy for everyone. This will be especially true for long-term traders as it will be the start of a new 23 year cycle.
We are still on the sidelines of gold and silver for now.
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