IMPORTANT UPDATES ON GOLD AND SILVER (11:30 pm EST)
Considering all the social, political, geopolitical, and economic tensions in the world right now, it is not surprising that gold and silver prices have gone parabolic. They are often the first "go-to" safe havens for jittery investors. Nevertheless, prices always rise and fall in cycles, and we need to be aware of some longer-term cycles in both metals that are due or overdue, which could put a bearish cap on the current rallies and usher in a significant correction.
There is an 8-year cycle in gold that could be peaking any time now. The peaks of some shorter cycles could also be imminent, with corrections to follow. Gold's parabolic price rise also suggests a "blow-off" top. If true, a steep correction would follow. The height of a blow-off top is hard to call, but timing it may be facilitated with cycle analysis.
We enter another reversal zone specifically for precious metals early next week (Feb. 3 -12). If a top in gold occurs before then, we could see a corrective low form within that time frame. But if prices continue to push higher, we could instead see a significant top then - especially if we see bearish divergence with silver next week (i.e., one, but not both, metals make a new all-time high). It's too late to chase this parabolic rally, so I'm going to wait for a significant correction before I consider any trade in this metal. If the setup looks right, I may also consider going short if a correction seems imminent.
Silver is very late in a long-term 18-year cycle, and the peak is now due/overdue and could happen at any time. Next week's reversal also applies to silver, so a top could be imminent. As with gold, a blow-off top is certainly possible here. A recent projection for the top was $106 - $113, and that has already been exceeded by today's high of $119. If we see bearish divergence between silver and gold in next week's reversal zone, I will consider selling short. For now, I am remaining on the sidelines of silver.
Considering all the social, political, geopolitical, and economic tensions in the world right now, it is not surprising that gold and silver prices have gone parabolic. They are often the first "go-to" safe havens for jittery investors. Nevertheless, prices always rise and fall in cycles, and we need to be aware of some longer-term cycles in both metals that are due or overdue, which could put a bearish cap on the current rallies and usher in a significant correction.
There is an 8-year cycle in gold that could be peaking any time now. The peaks of some shorter cycles could also be imminent, with corrections to follow. Gold's parabolic price rise also suggests a "blow-off" top. If true, a steep correction would follow. The height of a blow-off top is hard to call, but timing it may be facilitated with cycle analysis.
We enter another reversal zone specifically for precious metals early next week (Feb. 3 -12). If a top in gold occurs before then, we could see a corrective low form within that time frame. But if prices continue to push higher, we could instead see a significant top then - especially if we see bearish divergence with silver next week (i.e., one, but not both, metals make a new all-time high). It's too late to chase this parabolic rally, so I'm going to wait for a significant correction before I consider any trade in this metal. If the setup looks right, I may also consider going short if a correction seems imminent.
Silver is very late in a long-term 18-year cycle, and the peak is now due/overdue and could happen at any time. Next week's reversal also applies to silver, so a top could be imminent. As with gold, a blow-off top is certainly possible here. A recent projection for the top was $106 - $113, and that has already been exceeded by today's high of $119. If we see bearish divergence between silver and gold in next week's reversal zone, I will consider selling short. For now, I am remaining on the sidelines of silver.
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