Daily Gold News: Friday, May 20 – Gold Price Broke Above Short-Term Trading Range

Gold Price Recap

The gold futures contract gained 1.39% on Thursday, May 19, as it broke above its short-term trading range after bouncing from the $1,800 price level again. On Monday the market reached new local low of $1,785.00, but it closed above the $1,800 level. Gold retraced almost all of the February-March rally on strengthening U.S. dollar, Fed’s monetary policy tightening fears. So it went back to the $1,800 level where it’s been fluctuating for months in 2021. This morning yellow metal is trading along its yesterday’s closing price, as we can see on the daily chart (the chart includes today’s intraday data):

Precious Metals Price Action

Gold is 0.2% higher this morning, as it is trading closer to the $1,850 price level. It broke above a short-term consolidation following month-long decline. What about the other precious metals? Silver is 0.4% higher, platinum is 0.3% higher and palladium is 0.3% lower. So the main precious metals’ prices are slightly higher this morning.

Fundamentals and Economic News Schedule

Yesterday’s Unemployment Claims release has been higher than expected at 218,000. Today we won’t get any new important economic data releases.

The markets will still continue to react to the ongoing Russia-Ukraine war news.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for today.

Friday, May 20

  • All Day, Australia – Parliamentary Elections

Paul Rejczak
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

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Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported.

The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Here’s Why Warren Buffett Is Going All-In On The Commodities Supercycle

Commodity Markets Fundamental Analysis

That’s one of the most exciting hallmarks of the current Commodities Supercycle, that we find ourselves in right now!

This week, the energy markets took centre stage with Natural Gas prices surging back to all-time highs. Natural Gas price have now tripled since January – rallying from just under $3.50 to a current high of $8.54 – notching up a whopping gain of over 144%, so far this year.

Elsewhere in the energy markets, Crude Oil prices also started the week on a tear, surging to their highest level since March – in anticipation of higher demand as China – the world’s largest importer of crude began easing coronavirus-related restrictions.

Expectations are now running high, that the Oil market may see an identical V-shape recovery in demand as seen in 2020 when China ended lockdown. That event triggered an historic bull run taking Oil prices from sub $40 a barrel in April 2020 to a decade high of almost $140 a barrel in April 2022. That’s a record-breaking gain of more than 450%, in the last two years.

The bullish momentum has also split over into other commodities with Aluminium, Copper, Nickel, Gold, Silver, Palladium and Zinc prices soaring to fresh monthly and multi-year highs.

Over the past few years, the world has experienced an escalating series of disruptions from the U.S-China trade war, the Covid-19 pandemic, global lockdowns, Russia’s war with Ukraine to dueling economic sanctions and export controls.

The cumulative effects of these crises is fuelling an unstoppable Commodity Supercycle sending everything from the metals, energies to agriculture markets skyrocketing and positioning the entire sector as one of the most lucrative asset classes of this year, if not this decade.

As Commodity prices continue to surge, so has Wall Street’s interest.

Throughout this year, a long list of leading Wall Street banks from Goldman Sachs, JPMorgan to Bank of America have described commodities as their “preferred asset class over the next decade”.

This month, Warren Buffett, who is arguably the world’s most successful investor also joined that list.

Speaking at Berkshire Hathaway’s annual shareholders meeting, Buffett revealed that his biggest investment ever with a market value of over $51 billion is riding on the Commodities Supercycle.

In the words of Buffett, “the Commodity and Energy markets right now, represent one of the greatest generational opportunities of our lifetime, not to be missed.”

Commodity Price Forecast for 20.05.22

Where are prices heading next? Watch The Commodity Report now, for my latest price forecasts and predictions:

For a look at all of today’s economic events, check out our economic calendar.

Negative Feedback Loop, Oil Off the Lows ,Gold Shines + Friday Forex Follies – G10 and Asia FX

Global Macro and Stock Markets Analysis

Broader indexes are off the lows, but conviction remains near zero. The rebound was primarily due to covering bids by crowded shorts and a slight bounce in higher beta Tech as bond yields fall.

Mounting global recession risk is top-of-mind for markets but as the procession to recession shortens, growth concerns are rising, leaving equities vulnerable to the negative feedback loop.

What would typically be met with a shoulder shrug, incrementally weaker data can now amplify downside move. And with few positive developments of late, the market remains vulnerable to the prevailing narrative, with the negative feedback loop only growing louder in recent sessions.

Oil Fundamental Analysis

China is easing lockdowns and mobility restrictions in Shanghai and considering more widespread easing, leading to higher oil prices. Though Brent is off weekly highs, it is still well-above weekly lows.

The growing threat of disruption to Russian crude exports continues to help oil sentiment, despite opposition to an EU-wide embargo from Hungary and a handful of other EU member states that remain heavily reliant on Russia.

News of unrest in Libya reminds supply-side risks, but Russia remains the focus.

And while more extensive than expected drops in US crude and gasoline inventories initially had a limited impact, this week’s US inventory data still screens bullish for oil.

But if US growth data continues to sour, oil prices could get caught up in the negative stock market feedback loop.

Gold Fundamental Analysis

Gold has turned higher as US yields slip and the US dollar sheds some of its safe-haven appeals due to weaker US growth data.

The dynamic in the gold market has changed for the first time in several months. Bullion prices have begun liberating themselves from the tendency to sell into economic destruction, similar to other commodities, and now appear to be acting as a safe- haven. With gold performing well as equities tumble, bullion could catch a short market by surprise if it can hold this pattern.

Friday’s Forex Follies

The safe-haven dollar is not so safe these days.

The US dollar is weaker as the curve is pricing in fewer hikes, and some are putting higher weight on recession probability.

So, the focus has turned from don’t fight the Fed to a policy mistake with hikes getting priced out along the US curve on poor data and higher recession risks. The Fed is leading the hiking cycle, so USD will also get hit first as hikes are repriced lower.

Rates market Technicals are also playing a role, with 10y yields topping out near 3%. The lower end of the range is now 2.70%, so some in the market think there can be a test of that level on the downside; hence gold has found some lustre.

China stabilizing would be a massive weight off the equity market’s shoulders. A couple of well-positioned areas could see a flip if there starts to be some better news from China.

From the G10 side, AUD has room to move higher if China can stabilize short term (NZD and CAD should benefit).

JPY remains a buy in a recessionary environment, as is CHF on SNB intervention talk. The ECB is raising rates into a perfect storm that will undoubtedly widen periphery spreads, making lower EURCHF screens brighter.

In Asia FX, the periphery would benefit from any easing of China concerns. Hence there has been some selling interest across $Asia pairing longs and initiating some tactical shorts on the China easing impulse. I think the undervalued MYR could be an excellent rally candidate with the BNM already hiking rates. And of course, the travel-sensitive THB is well on its way after the robust trade data, and a bounce in tourism will meld to offer the BoT room to hike rates to ward off imported inflation.

As we suggested on the China reopening bounce, it could turn the tide for the YUAN; it is seemingly doing that as there has been less USD buying the past few sessions while longs have started to give way to a strong domestic equity impulse.

However, the lower move is likely due to reports suggesting members of the Chinese Communist Party should shed overseas assets is likely contributing to the downdraft.

For a look at all of today’s economic events, check out our economic calendar.

Silver Price Prediction – Silver prices rally as the dollar falls on weak jobs data

Key Insights

  • Silver prices rose as the dollar pulled back.
  • Treasury yields continue to fall on rising bond prices.
  • Oil prices fall as US companies plan to increase supply. 

Silver prices traded higher amid disappointing jobs data pointing toward potential slowing economic growth. Gold prices rise as yields and the dollar slide due to its safe-haven appeal.

The dollar retreats on weaker-than-expected jobs data. Benchmark yields slid as investors pour into bonds amid the market sell-off. The ten-year yield slid by 7 basis points today.

Oil prices move higher on the prospect of a European ban on Russian oil. This situation has offset plans of easing restrictions in Shanghai, which can boost demand.

Last week’s jobless claims unexpectedly rose to their highest levels since January. Initial claims rose to 218,000, increasing by 21,000 from the previous week. However, continuing claims dropped to 1.32 million, the lowest level since 1969.  

Higher interest rates reduce demand for labor. The Fed’s plans to aggressively tighten rates to rein in inflation can reduce the tightness of the labor market, and there might be an uptick in demand compared to job supply.

Technical Analysis

Silver prices hit one-week highs and are headed toward the $22 level. A pullback in prices will find support near the mid $21 level, favoring bullish traders. A larger break below that level might shift bias toward a bearish outlook.

Support is seen near the 10-day moving average of $21.5. Resistance is seen near the $22 level. Short-term momentum is positive as the fast stochastic had a crossover buy signal.

The medium-term momentum turns positive as the histogram prints positively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in positive territory, which reflects an upward trend in price movement.

Gold Price Prediction – Gold prices extend gains on weak jobs data

Key Insights

  • Gold prices move higher as a safe-haven asset.
  • Jobless claims indicate slower economic growth.
  • Treasury yields dropped on weak jobs data.

Gold prices traded higher as the dollar and yields pullback. Gold prices due to their safe-haven appeal to investors given the mirky economic sentiment.

The dollar retreats on weaker-than-expected jobs data. Benchmark yields slid as investors pour into bonds amid the market sell-off. The ten-year yield slid by 7 basis points today. 

Jobless claims unexpectedly rose last week to their highest levels since January. Initial claims increased to 218,000, rising by 21,000 from the previous week. However, continuing claims dropped to 1.32 million, the lowest level since 1969.  

The Fed’s plans to aggressively tighten rates to rein in inflation can reduce the tightness of the labor market. There might be an uptick in demand compared to job supply as higher interest rates reduce demand for labor.

Technical Analysis

Gold prices extend gains above the 200-day as inflation switches to neutral bias from its negative outlook. Gold prices reclaimed the 200-day moving average of 1838, but a close above this level is needed to solidify its neutral position. Support is seen near the 200-day moving average near 1838.

Resistance is seen near the May 12th high of 1858. Short-term momentum is positive as the Fast Stochastic might generate a crossover buy signal. Prices are no longer oversold as the fast stochastic prints a reading of 42.10 above the oversold trigger level of 20. 

Medium-term momentum turns positive as the MACD might generate a crossover buy signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line.

The  MACD (moving average convergence divergence) histogram has a negative trajectory that points to lower prices.

Natural Gas Price Prediction – Prices soared as working gas storage increased

Key Insights

  • Natural gas prices moved higher.
  • The weather is expected to be average or above normal throughout most of the U.S.
  • Weekly natural gas storage increased from the previous week. 

On Thursday, natural gas prices extended their rebound for the fourth consecutive trading session. According to the National Oceanic Atmospheric Administration, the weather is expected to be warmer than normal or average during the next 6-10 days.

The weather is supposed to be above average for the next 8-14 days throughout most of the United States.

According to the EIA, weekly natural gas storage rose by 85 Bcf from the previous week to 1,732 Bcf. Total working gas in underground storage falls within the five-year range. However, stockpiles of natural have are 358 Bcf less than last year at the same time.

Technical Analysis

On Thursday, natural gas prices sustained upward traction holding near the mid $8 region. Prices might test target resistance near the $9.00 level, the 2022 peak. Short-term momentum is positive as the fast stochastic generated a crossover buy signal.

Medium-term momentum might turn positive but is flat. The MACD (moving average convergence divergence) histogram prints in neutral territory with a rising trajectory, meaning range-bound trade action.

USD/CAD Price Prediction – USD/CAD slides as dollar weakness counters rising oil prices

Key Insights

  • Gold prices move higher as a safe-haven asset.
  • Treasury yields continue to tumble on rising bond prices.
  • Oil prices rise on the prospect of a Russian oil embargo.

USD/CAD faces weakness on weaker-than-expected US jobs data. Gold prices rise on its safe-haven appeal as yields and the dollar slide. The dollar eases on disappointing jobs data. Benchmark yields slid as investors piled into bonds amid the market sell-off.

The ten-year yield slid by 7 basis points today. Oil prices rose on the prospect of a European ban on Russian oil. This situation has countered plans of easing restrictions in Shanghai, which can boost demand.

Last week’s jobless claims unexpectedly moved to their highest levels since January. Initial claims rose to 218,000, increasing by 21,000 from the previous week. However, continuing claims dropped to 1.32 million, the lowest level since 1969.  

The Fed’s plan for higher interest rates reduces demand for labor. The Fed’s plans to aggressively tighten rates to rein in inflation can reduce the tightness of the labor market, and there might be an uptick in demand compared to job supply.

Technical Analysis

The USD/CAD remains in the 1.28 region despite the selling of the dollar. he 1.287 level. However, the risk-off environment should underpin the dollar and encourage some buying of the dip among investors.

A more aggressive Fed should boost yields and further support the upside for the currency pair.

Resistance is seen near the 10-day moving average of 1.292. Support is seen near the May 5th low near 1.27. Short-term momentum turned negative as the fast stochastic had a crossover sell signal. 

Medium-term momentum turns negative as the MACD line might generate a crossover sell signal. This scenario happens when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day MA of the MACD line).

The trajectory of the MACD is in positive territory, which reflects an upward trend in price movement.

Silver Price Forecast – Silver Markets Run Into a Brick Wall

Silver Markets Technical Analysis

Silver markets have rallied significantly to kick off the trading session on Thursday, slamming into the crucial $22 level. This is an area that previously had been supportive, but now looks like it is going to be resistive. A pullback from this area would make quite a bit of sense, especially if the US dollar starts to strengthen again. Remember, silver is especially sensitive to the US dollar, and therefore you should keep in mind what the US Dollar Index is doing anytime you trade this market.

On the upside, even if we do break above the $22 level, I do not find it very palatable to get long of silver. If I were to be a buyer of precious metals at the moment, it would be gold, as it offers more protection against inflation. Remember, silver has a significant industrial and commercial component to it, so if we truly are going into a major slowdown, it is difficult to imagine a scenario where silver will do well over the longer term. With this in mind, I believe that we will continue to see sellers every time it rallies a bit too much, taking advantage of what is typically a very volatile market to begin with.

If we do break out to the upside, it is not until we clear the $23 level that I can take any rally serious. At this point, I would also need to see the US dollar falling across-the-board, something that does not look likely to happen for any sustainable amount of time. With this, I am looking for signs of exhaustion on short-term charts.

Silver Price Forecast Video 20.05.22

For a look at all of today’s economic events, check out our economic calendar.

Crude Oil Price Forecast – Crude Oil Markets Continue Volatile Behavior

WTI Crude Oil Technical Analysis

The West Texas Intermediate Crude Oil market has gone back and forth during the trading session on Thursday, bouncing from the 50 day EMA at one point, as we continue to see a lot of noise in this market. Ultimately, I think we have got a situation where we need to pay close attention to the channel that we have been in, as it does seem to be holding. It is also worth noting that the 50 day EMA has been the beginning of some rather impressive support that extends down to that previous uptrend line. Because of this, a bounce makes more sense than anything else, but if we were to break down below the $100 level one would have to think that at the very negative sign.

Crude Oil Prices Forecast Video 20.05.22

Brent Crude Oil Technical Analysis

Brent has also fallen to the 50 day EMA, only to show signs of life again. By doing so, this market looks as if it is ready to bounce again, and therefore I think is going to follow WTI higher. If we can break above the highs of the day, then it would confirm that we have more momentum jumping in and is likely that Brent will go looking to reach the $115 level. Given enough time, I anticipate we will probably do that, but if we turn around a break down below the uptrend line, all bets are off and we would have to assume that Brent would fall right along to the 200 Day EMA rather quickly. Obviously, this would be a very negative turn of events, perhaps due to a slowing global economy.

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Forecast – Natural Gas Markets Recover Initial Selling Pressure

Natural Gas Technical Analysis

Natural gas markets have fallen initially during the day on Thursday but underneath the $8.00 level, we found buyers that were willing to step in and pick this market up. By doing so, the market looks as if it is ready to continue trying to break to the upside but obviously, we are getting a bit extended. Alternatively, if we were to turn around a breakdown below the bottom of the candlestick for the trading session on Thursday, it opens up the possibility of a significant selloff. That does not necessarily mean that we would change trends, just that it could be rather quick.

In fact, it is not until we break down below the $6.50 level that I would consider this trend possibly changing, and even then I think you have to look at the fundamental situation. Obviously, natural gas has been like a wrecking ball for anybody who has shown an interest in shorting it for a bigger move. That being said, it is probably only a matter of time before we see a lack of demand jump into this market and cause some issues.

As things stand right now, that does not look to be the case, so I believe we are more likely than not going to see a “buy on the dips” type of mentality going forward. Ultimately, this is a market that I believe will continue to be very noisy, but that is typical for this market as it is one of the smaller ones. Position sizing is crucial in all markets, but it is especially true in this one as it gets out of control rather quickly.

Natural Gas Price Forecast Video 20.05.22

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Forecast – Gold Markets Get a Significant Bounce

Gold Market Technical Analysis

Gold markets have rallied quite significantly during trading on Thursday to show signs of life again. That being said, we still have the 200 Day EMA above that could cause a little bit of technical resistance, but if we start to see bond yields drop in the United States, gold might be the first place money runs to. That being said, gold markets will more than likely remain volatile going forward, and therefore I think it is a bit difficult and dicey to say the least to go in with a huge position.

If we can break above the 200 Day EMA, that would justify a certain amount of technical buying, and of course would attract a lot of attention in general. In that scenario, I would anticipate that the market continues to find plenty of buyers, but you need to keep an eye on the 10 year yields in America, because if they start to fall, that could give gold the booze that it needs. Ultimately, this is a market that is trying to figure out what is going on with the $1800 level, as it has been a major level multiple times, so it will be interesting to see if it continues to hold as support. If it does, we may have just found the bottom.

On the other hand, if we break down below the Monday candlestick, it would be extraordinarily bearish, opening up a flood gate of sorts, and probably accelerating the downside quite rapidly. In that scenario, the $1750 level would be targeted, followed by the $1700 level. At this point, you need to be very cautious with your position size until we get confirmation.

Gold Price Predictions Video 20.05.22

For a look at all of today’s economic events, check out our economic calendar.

Natural Gas Price Fundamental Daily Forecast – Slightly Lower Ahead of EIA Data on Weakened Heat Expectations

U.S. natural gas futures are trading lower on Thursday shortly before the release of the government’s weekly storage report. Simultaneously, the situation is different in the cash market today, however.

Reuters is reporting that U.S. spot power and natural gas prices soared on Thursday to their highest level in over a year in several parts of the country as consumers cranked up air conditioners to escape an early spring heatwave.

Additionally, even before the latest heatwave, gas futures were already trading near a 13-year high. The catalyst behind that is much higher prices in Europe and Asia due to excessive demand for U.S. liquefied natural gas (LNG) exports strong, especially since Russia’s Feb. 24 invasion of Ukraine.

At 13:53 GMT, July natural gas futures are trading $8.314, down $0.141 or -1.67%. The United States Natural Gas Fund ETF (UNG) is at $29.23, down $0.26 or -0.91%.

Demand Could Hit Record Levels in Some Parts of Country

Spot market demand is soaring in parts of the country.

Accordingly, in Pennsylvania, for example, the next-day power at the PJM West hub and gas at the Dominion South hub rose to their highest since the February freeze in 2021.

In Texas, the Electric Reliability Council of Texas (ERCOT), which operates the grid for most of the state, forecast demand would peak at a monthly record on Thursday. ERCOT said the grid had enough resources to meet demand early on Thursday.

Reuters said at the start of the current heat, ERCOT was forced to urge conservation on May 13 after several power plants shut unexpectedly, causing real-time prices to soar to over $4,000 per megawatt (MWh).

Daily Forecast

U.S. futures are drifting lower as overnight modeling weakened heat expectations for key demand areas at the end of May and into early June.

Today the U.S. Energy Information Administration (EIA) will release its weekly storage report at 14:30 GMT. Traders are expecting it to show a build in the upper 80’s.

Natural Gas Intelligence (NGI) is reporting that Bloomberg estimates are ranging from 83 Bcf to 93 Bcf, with a median build of 89 Bcf. Results of Reuters’ poll spanned estimates increases of 80 Bcf to 98 Bcf, with a median of 88 Bcf.

If the report comes in as expected, it would be in line with the five-year average injection for the period of 87 Bcf.

NatGasWeather added that “survey averages suggest a build of +85-87 Bcf, exact to the 5-year average. It was much hotter than normal over most of the U.S. besides the cooler West and East.”

“Two lines of thinking on the build, either early season heat overcomes strong wind energy for a build near +83-84 Bcf, and what our official estimate is. A second line of thinking is strong wind energy offsets last week’s heat and the build prints closer to +90 Bcf.”

Technically speaking, the key area to watch over the near-term is the retracement zone at $7.581 to $7.330. A test of this area could bring in new buyers. Moreover, if it fails, the market could break into the value zone at $5.283 to $5.630, making it more attractive to longer-term bulls.

For a look at all of today’s economic events, check out our economic calendar.

Here is Why I’m Still Bullish on Gold Miners

Precious metals declined yesterday, and so did the general stock market. Is the rally already over?

When I wrote about this rally on May 12, which took place at the same time when I took profits from the short positions and entered the long ones, I mentioned that I planned to hold these long positions for a week or two. Since that was exactly a week ago, the question is: is the top already in?

In short, it probably isn’t. As always, it’s useful to check what happened in the past in similar situations to verify whether what we see is normal or some kind of an outlier that cannot be explained by something that has already happened.

Let’s start with a quote from yesterday’s analysis:

Of course, there will be some back-and-forth movement on an intraday basis, but it doesn’t change anything. Junior miners are likely to rally this week nonetheless. And perhaps not longer than that, as the next triangle-vertex-based reversal is just around the corner – on Friday/Monday.

The previous few days were the “forth” and yesterday was the “back” movement – so far, my comments remain up-to-date. However, comparing the market action with what I wrote previously isn’t what I meant by analogies to past situations. I meant this:

ChartDescription automatically generated

The areas marked with green rectangles are the starting moments of the previous short-term rallies. Some were bigger than others, and yet they all had one thing in common. They all included a corrective downswing after the initial post-bottom rally.

Consequently, what we saw yesterday couldn’t be more normal during a short-term rally. This means that yesterday’s decline is not bearish at all and the profits from our long positions are likely to increase in the following days.

Besides, the general stock market declined by over 4%, while the GDXJ (normally moving more than stocks) ETF – a proxy for junior mining stocks – declined by only about 2%.

ChartDescription automatically generated

If the general stock market continues to decline, junior miners could get a bearish push even if gold prices don’t decline.

However, let’s keep in mind the fact that miners tend to bottom before stocks do – in fact, we saw that in early 2020. This means that even if the S&P 500 moves to new yearly lows shortly and then bounces back up, the downside for miners could be limited, and the stocks’ rebound could trigger a profound immediate-term rally.

If stocks decline, then they have quite strong support at about 3815 – at their 38.2% Fibonacci retracement level.

Let’s keep in mind that junior miners have triangle-vertex-based reversal over the weekend, so they might form some kind of reversal on Friday or Monday.

Ideally, miners would be after a quick rally that is accompanied by huge volume on Friday. This would serve as a perfect confirmation that the top is in or at hand.

However, we can’t tell the market what it should do – we can only respond to what it does and position ourselves accordingly. Consequently, if stocks take miners lower, it could be the case that Friday or Monday will be the time when they bottom. This seems less likely to me than the previous (short-term bullish) scenario, but I’m prepared for it as well. In this case, we’ll simply… wait. Unless we see some major bearish indications, we will wait for the rally to end, perhaps sometime next week.

Again, a nearby top appears more likely than another bottom, in particular in light of what I wrote about the common post-bottom patterns in the GDXJ.

Having said that, let’s take a look at the markets from a fundamental point of view.

The Chorus Continues

While investors still struggle with the notion that the Fed can’t bail them out amid soaring inflation, the S&P 500 and the NASDAQ Composite suffered another reality check on May 18. Moreover, with Fed officials continuing to spread their hawkish gospel, I warned on Apr. 6 that demand destruction does not support higher asset prices. I wrote:

Please remember that the Fed needs to slow the U.S. economy to calm inflation, and rising asset prices are mutually exclusive to this goal. Therefore, officials should keep hammering the financial markets until investors finally get the message.

Moreover, with the Fed in inflation-fighting mode and reformed doves warning that the U.S. economy “could teeter” as the drama unfolds, the reality is that there is no easy solution to the Fed’s problem. To calm inflation, it has to kill demand. And as that occurs, investors should suffer a severe crisis of confidence.

To that point, while the S&P 500 and the NASDAQ Composite plunged on May 18, Fed officials didn’t soften their tones. For example, Philadelphia Fed President Patrick Harker said:

“Going forward, if there are no significant changes in the data in the coming weeks, I expect two additional 50 basis point rate hikes in June and July. After that, I anticipate a sequence of increases in the funds rate at a measured pace until we are confident that inflation is moving toward the Committee’s inflation target.”

For context, “measured” rate hikes imply quarter-point increments thereafter.

Please see below:

Graphical user interface, text, application, chat or text messageDescription automatically generatedSource: Reuters

Likewise, Chicago Fed President Charles Evans delivered a similar message on May 17. He said that by December, “we will have completed any 50 [basis point rate hikes] and have put in place at least a few 25 [basis point rate hikes].”

Moreover, “given the current strength in aggregate demand, strong demand for workers, and the supply-side improvements that I expect to be coming,” he added that “I believe a modestly restrictive stance will still be consistent with a growing economy.”

Therefore, while their recent rhetoric had Fed officials “expeditiously” marching toward neutral, now the prospect of a “restrictive stance” has entered the equation. For context, a neutral rate neither stimulates nor suffocates the U.S. economy. However, when the federal funds rate rises above neutral (restrictive), the goal is to materially slow economic activity and consumer spending. As such, the medium-term liquidity drain is profoundly bearish for the S&P 500 and the PMs.

Please see below:

Source: Reuters

Making three of a kind, Minneapolis Fed President Neel Kashkari (a reformed dove) said on May 17 that “My colleagues and I are going to do what we need to do to bring the economy back into balance…”

“What a lot of economists are scratching their heads and wondering about is: if we really have to bring demand down to get inflation in check, is that going to put the economy into recession? And we don’t know.”

For context, Fed officials initially thought inflation was “transitory,” so don’t hold your breath waiting for that “soft landing.” However, while Kashkari is ~16 months too late to the inflation party, he acknowledged the reality on May 17:

Text, chat or text messageDescription automatically generatedSource: Bloomberg

As a result, while the S&P 500 and the NASDAQ Composite sell-off in their search for medium-term support, Fed officials haven’t flinched in their hawkish crusade. As such, I’ve long warned that Americans’ living standards take precedence over market multiples.

To that point, the U.K. headline Consumer Price Index (CPI) hit 9% year-over-year (YoY) on May 18. For the sake of objectivity, the results underperformed economists’ consensus estimates (the middle column below).

Source: Investing.com

However, while investors may take solace in the miss, they should focus on the fact that the U.K. output Producer Price Index (PPI) materially outperformed expectations and often leads the headline CPI. As a result, the inflation story is much more troublesome than it seems on the surface.

Please see below:

Source: Investing.com

In addition, British Finance Minister Rishi Sunak warned of a cost of living crisis on May 18, saying that “as the situation evolves our response will evolve” and “we stand ready to do more.”

Please see below:

TextDescription automatically generatedSource: Reuters

Even more revealing, I’ve noted on numerous occasions that Canada is the best comparison to the U.S. due to its geographical proximity and its reliance on the U.S. to purchase Canadian exports. Therefore, with Canadian inflation outperforming across the board on May 18, the data paints an ominous portrait of the challenges confronting North American central banks.

Please see below:

Graphical user interface, text, applicationDescription automatically generated Source: Investing.com

To that point, the official report stated:

“Canadians paid 9.7% more in April for food purchased from stores compared with April 2021. This increase, which exceeded 5% for the fifth month in a row, was the largest increase since September 1981. For comparison, from 2010 to 2020, there were five months when prices for food purchased from stores increased at a rate of 5% or higher….

“Basics, such as fresh fruit (+10.0%), fresh vegetables (+8.2%) and meat (+10.1%), were all more expensive in April compared with a year earlier. Prices for starchy foods such as bread (+12.2%), pasta (+19.6%), rice (+7.4%) and cereal products (+13.9%) also increased. Additionally, a cup of coffee (+13.7%) cost more in April 2022 than in April 2021.”

Moreover, “in April, shelter costs rose 7.4% year over year, the fastest pace since June 1983, following a 6.8% increase in March.” Therefore, the data is nearly synonymous with the U.S., and I’ve been warning for months that rent inflation would prove much stickier than investors expected.

Please see below:

Source: Statistics Canada

Finally, the investors awaiting a dovish pivot from the Fed assume that growth will overpower inflation. In a nutshell: the U.S. economy will sink into a deep recession in the next couple of months (some believe that we are already in one), and the Fed will resume QE. Moreover, they assume that the inflationary backdrop has left consumers destitute and that we’re a quarter away from famine.

However, I couldn’t disagree more. With Home Depot – which primarily sells discretionary items – noting that consumers are showing no signs of slowing down, I warned on May 18 that investors don’t realize that the Fed’s war with inflation would be one of attrition.

Please see below:

ApplicationDescription automatically generated with medium confidenceSource: Home Depot/The Motley Fool

For context, the National Retail Federation (NRF) listed Home Depot as the fourth-largest retailer in the U.S. in its 2021 report. As a result, the company’s performance is a reliable indicator of U.S. consumer spending.

Graphical user interface, text, applicationDescription automatically generatedSource: NRF

To that point, The Confidence Board released its U.S. CEO Confidence survey on May 18. The report revealed:

CEO confidence “declined for the fourth consecutive quarter in Q2 2022. The measure now stands at 42, down from 57 in Q1. The measure has fallen into negative territory and is at levels not seen since the onset of the pandemic. (A reading below 50 points reflects more negative than positive responses.)”

Please see below:

Chart, line chartDescription automatically generated

However, the devil is in the details and the details are what matter to the Fed. For example:

“More than half (54%) of CEOs said they were effectively managing rising input costs by passing along costs to customers, while 13% said they had no major issues with input costs.”

ChartDescription automatically generatedSource: The Confidence Board

Second:

“More than two-thirds of CEOs said they are increasing wages across the board in response to labor market conditions and managing rising labor costs through different means.”

ChartDescription automatically generated with medium confidence Source: The Confidence Board

More importantly, though:

Graphical user interface, text, application, emailDescription automatically generated Source: The Confidence Board

Therefore, while consolidated CEO confidence has crashed to “levels not seen since the onset of the pandemic,” nearly two-thirds of CEOs plan to increase their workforce and more than nine out of 10 plan to increase wages. As a result, would major U.S. corporations be adding employees and paying them more if demand has fallen off a cliff? Of course not. Moreover, when considering the 15-point drop in consolidated CEO confidence, the three-point decline in employment expectations is largely immaterial.

Bottom Line

While investors keep using the post-GFC script as their roadmap for when the Fed turns dovish, they don’t realize that 1970s/1980s-like inflation is a completely different animal. Thus, what I wrote on May 18 should prove prescient in the coming months:

While Powell keeps warning investors of what’s to come, a decade of dovish pivots has a generation of investors believing that the central bank is all talk and no action. However, with inflation at levels unseen in 40+ years, Powell is not out of ammunition, and the Fed followers should suffer profound disappointment as the drama unfolds.

In conclusion, the PMs declined on May 18, as risk-off sentiment returned to the financial markets. However, since fits and starts are always expected along the way, the GDXJ ETF should have more upside in the coming days, and profits from our long position should increase. The medium-term outlook for the mining stocks remains bearish, though.

Thank you for reading our free analysis today. Please note that the above is just a small fraction of today’s all-encompassing Gold & Silver Trading Alert. The latter includes multiple premium details such as the targets for gold and mining stocks that could be reached in the next few weeks. If you’d like to read those premium details, we have good news for you. As soon as you sign up for our free gold newsletter, you’ll get a free 7-day no-obligation trial access to our premium Gold & Silver Trading Alerts. It’s really free – sign up today.

Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Sunshine Profits: Effective Investment through Diligence & Care

* * * * *

All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits’ associates only. As such, it may prove wrong and be subject to change without notice. Opinions and analyses are based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are deemed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski’s, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Daily Gold News: Thursday, May 19 – Gold Price Extends Consolidation

Gold Price Recap

The gold futures contract lost 0.16% on Wednesday, May 18, as it continued to fluctuate following the recent declines. On Monday the market reached new local low of $1,785.00, but it closed above the $1,800 level. Gold retraced almost all of the February-March rally on strengthening U.S. dollar, Fed’s monetary policy tightening fears. It went back to the $1,800 level where it’s been fluctuating for months in 2021. This morning yellow metal is trading closer to the recent local highs, still within a short-term consolidation, as we can see on the daily chart (the chart includes today’s intraday data):

Precious Metals Price Action

Gold is 0.7% higher this morning, as it is bouncing from the $1,800 price level. It is still trading within a short-term consolidation following a month-long decline. What about the other precious metals? Silver is 1.1% higher, platinum is 0.4% higher and palladium is 0.8% lower. So the main precious metals’ prices are higher this morning.

Fundamentals and Economic News Schedule

Yesterday’s Housing Starts release has been slightly lower than expected at 1.72M, and the Building Permits release has been slightly higher than expected at 1.82M. Today we will get the Unemployment Claims, Philly Fed Manufacturing Index, Existing Home Sales and CB Leading Index releases.

The markets will still continue to react to the ongoing Russia-Ukraine war news.

Below you will find our Gold, Silver, and Mining Stocks economic news schedule for the next two trading days.

Thursday, May 19

  • 8:30 a.m. U.S. – Unemployment Claims, Philly Fed Manufacturing Index
  • 10:00 a.m. U.S. – Existing Home Sales, CB Leading Index m/m

Friday, May 20

  • All Day, Australia – Parliamentary Elections

For a look at all of today’s economic events, check out our economic calendar.

Paul Rejczak
Stock Trading Strategist
Sunshine Profits: Analysis. Care. Profits.

* * * * *

Disclaimer

All essays, research and information found above represent analyses and opinions of Paul Rejczak and Sunshine Profits’ associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Paul Rejczak and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Rejczak is not a Registered Securities Advisor. By reading Paul Rejczak’s reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Paul Rejczak, Sunshine Profits’ employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

 

Price of Gold Fundamental Daily Forecast – Watch for Upside Breakout if 10-Year Yield Falls Below 2.77%

Gold futures are trading higher on Thursday and higher for the week, but more importantly, the small support base it has been building the past four days is starting to take on a bullish appearance.

Now before you get too excited, we’re not talking about new record highs, but if conditions are right and enough bullish speculators return, we could see a test of $1938.60 over the near-term.

At 10:17 GMT, August Comex gold futures are trading $1833.60, up $11.20 or +0.61%. On Thursday, the SPDR Gold Shares ETF (GLD) settled at $169.40, up $0.07 or +0.04%.

The Case for Higher Prices

What would be the right conditions to fuel a rally? Number one on my list is a plunge in equity markets so strong that safe-haven buying of U.S. bonds drives yields sharply lower.

A drop in yields would lower the opportunity cost of holding gold. This could encourage some weak short-sellers to cover their positions. Initially, this could trigger a surge into $1890.00 – $1900.80. But overtaking $1900.80 could create enough upside momentum to trigger further short-covering into $1917.60, followed by $1938.60.

The tricky part about playing gold for an upside breakout is navigating a stronger U.S. Dollar. If a stock market sell-off encourages flight-to-safety concerns then look for money to flow into the traditional safe-havens:  Treasury Bonds, the U.S. Dollar and the Japanese Yen.

As alluded to earlier, money will flow into gold if Treasury yields drop significantly. But a stronger U.S. Dollar will likely limit gains. That’s why we’re only looking for gold prices to surge into $1890.00 – $1900.80, or at best $1938.60. If it move beyond these potential resistance levels then good for you if you’re long gold.

Gold could also receive some support from stock sellers who choose to park their money in bullion. But the traditional safe-havens usually attract more inflows because they are more liquid.

Daily August Comex Gold

Daily Forecast

August Comex gold is currently poised to breakout out over $1854.80. This could trigger an acceleration into $1890.00 to $1900.80.

The catalyst behind the anticipated breakout will be a drop in the benchmark 10-year U.S. Treasury yield.

The first key yield level to watch is 2.84%. Taking out this level will be the first sign of weakness. The second yield level to watch is 2.77%. This could be the trigger point for an acceleration to the upside in gold.

Gold prices could spike even higher if the 10-year yield breaks through 2.70%.

For a look at all of today’s economic events, check out our economic calendar.

Stocks Sink in a Vicious Sea of Red; Oil Bulls Are Blindsided by Stagflation Fear, Rates Down Trigger Demand for JPY, Leaving Gold in No Man’s Land

Global Macro and Stock Markets Analysis

US equities fell sharply Wednesday, S&P down 4%, the most significant daily decline since June 2020. The weakness came as Target’s quarterly earnings added fuel to the recession risk narrative, while the drop of US10 year yields down 10bps to 2.88% offered little support. And Oil settled at 2.3% lower on the day.

Equities continue to be at the mercy of broader macro themes, with more hawkish comments from Fed Chair Jay Powell leading to a further move higher in front-end rates, which continues to prove problematic for risk.

Medium-term, the Fed is likely to respond to any easing in financial conditions by ratcheting up the hawkish noises and, in effect, acting as a lid on the markets. And this should keep active money on the sidelines.

The relief rally trap door sprung when the S& P 500 4000 pins snapped after Target‘s earnings results exacerbated some recession fears that continued the theme of rising inventories detailed by Walmart on Tuesday. And the broad-based sell-off absolutely hammered tech.

Indeed, contagion from bellwether consumer earnings prints is sending stagflationary shockwaves through the market, and equities suffered another massive bout of indigestion after yesterday’s Alka Seltzer moment.

While rising inventories and higher inventory/sales ratios are not new, the big boxes now confirm recessionary worries and catalyze the severity of the sum of all stagflationary fears.

Oil Fundamental Analysis

The China reopening trade got blindsided by intense global recessionary impulses.

It is a very volatile market, but there are enough reasons to suggest why traders are looking to sell in the current environment.

An actual recession is likely one of the few antagonists that can contain oil prices with a supply deficit. And as the procession to recession shortens, oil prices could continue to fall due to demand concerns.

In addition to Venezuela barrels possibly coming to market offsetting the ongoing political fractious Libyan supply disruption, the EU sanctions package currently under discussion would likely legalize Russian supplies’ status quo at least through the year and take pressure off the prompt contract.

FOREX Fundamental Analysis

It was another busy day in G-10 FX with broad-based dollar demand across the spectrum, driven by a hawkish FED and safe-haven demand, which are two primary supportive channels for King Dollar.

Investors continue to evaluate the diverging approaches taken by central banks amid an inflation crisis. Federal Reserve Chair Jay Powell issued some hawkish comments on Tuesday about the possibility of raising the Fed Funds above neutral. At the same time, the Bank of England seems to have fallen behind the curve with its dovish approach, despite rampant inflation data emerging earlier Tuesday.

But folks that trade for a living, not analyze currencies as a job, are looking to buy JPY, which suggests the worm is turning on USDJPY.

Japanyese Yen

Local investor interest in buying USDJPY in the Asian session saw the pair touch a high in the 129.50/60 zone, coinciding with highs in various JPY crosses.

Since then, the pair has been heavy on rallies and opened the North America session near 129.00/10. This morning we open the Asia session at 128.30 as safe-haven demand is kicking in.

The JPY looks attractive with the global economy on the precipice of recession. JPY is interesting as the rise in USDJPY YTD has opened an enormous value gap for what is typically perceived as a safe-haven currency. Historically FX hedges for massive risk-off scenarios suggest that the YEN provides an excellent firebreak to the recessionary flames, especially against a “stock down rates down” seismic shock or a market backdrop consistent with recessionary pricing.

British Pound

Besides the Brexit risk and the BoE as a reluctant rate hiker, domestic political risk never seems to leave the GBP spectrum. “Red Wall” Conservative members of parliament are planning to ask Chancellor Rishi Sunak to remove Andrew Bailey as governor of the Bank of England. It seems nigh on impossible this would succeed, but it reflects the political pressure being heaped on the BoE.

Bailey is just two years into an eight-year term. Bailey has not helped himself, with comments such as predicting an “apocalyptic” rise in food prices earning him opprobrium from all corners.

Questioning the ability of your top central banker cannot be suitable for the currency.

Swiss Franc

USDCHF and CHF crosses continue to trade heavily, with little bounces, after SNB Chairman Jordan said the central bank is “ready to act if inflation strengthens.”

There is no relief in the crosses after disappointing quarterly results from major retailers weighed on the broader markets.

Gold Fundamentals

Gold is caught in the tug of war between recessionary safe-haven demand and do not fight the fed mode.

It is a tough market for gold investors, with stocks tanking and the street moving into a capitulatory sell-all frame of mind. And even lower bond yields are offering little support leaving bullion investors adrift in no man’s land.

For a look at all of today’s economic events, check out our economic calendar.

Gold Price Prediction – Gold Prices Traded Flat Despite Risk-Off Market Sentiment

Key Insights

  • Gold prices held steady despite a drop in yields.
  • Fed expected to have two 50-basis point hikes. 
  • Treasury yields dropped in risk-off sentiment.

Gold prices remained little changed despite the downward slide in yields. The dollar rallies to two-decade highs as investors place bets longing the dollar. Benchmark yields erased gains as investors piled into bonds due to the sell off in stocks.

The Dow Jones and Nasdaq saw huge daily declines as inflation concerns rose following earnings reports. The ten-year yield slid by 9 basis points today. 

Residential housing starts fell by 0.2% in April due to rising mortgage rates. The 30-year loan increased to 5.3% last week from 2.94 a year ago. Spiraling inflation combined with high material prices has weighed on the housing market. 

Philadelphia Fed President Harker stated that the Fed will have two 50-basis point hikes in June and July at the FOMC meetings.

Technical Analysis

Gold prices will remain rangebound in light of Fed rate hike expectations. Gold prices face downward momentum toward the 1,800 level and are headed toward $1780, which was near the low of today’s trading session.

Support is seen near the May 16th lows near 1788. Resistance is seen at the former support level near the 200-day moving average of 1,838. 

Short-term momentum turns negative as the Fast Stochastic might generate a crossover sell signal. Prices remain oversold as the fast stochastic prints a reading of 22.22 below the oversold trigger level of 20.

Medium-term momentum has turned negative as the MACD generates a crossover sell signal. This occurs as the 12-day moving average minus the 26-day moving average crosses below the 9-day moving average of the MACD line.

The  MACD (moving average convergence divergence) histogram has a negative trajectory that points to lower prices.

Silver Price Prediction – Silver prices face downward pressure amid a more hawkish Fed

Key Insights

  • Silver prices face downward pressure.
  • Treasury yields declined on sell off in stocks.
  • Oil prices fall as US companies plan to increase supply. 

Silver prices face downward momentum on a stronger dollar and more aggressive Fed monetary policy. The dollar rallies to two-decade highs as investors place bets longing the dollar. Benchmark yields erased gains as investors piled into bonds due to the sell off in stocks. 

The Dow Jones and Nasdaq saw huge daily declines as inflation concerns rose following earnings reports. The ten-year yield slid by 9 basis points today. Oil prices decline as US companies plan to increase output, which offsets supply concerns from the Russian oil embargo.

April housing starts fell by 0.2% amid rising mortgage rates. The 30-year loan increased to 5.3% last week from 2.94 a year ago. Spiraling inflation combined with high material prices has weighed on the housing market. 

Philadelphia Fed President Harker stated that the Fed will have two 50-basis point hikes in June and July at the FOMC meetings.

Technical Analysis

Silver prices could not break the $21.50 level despite risk-off sentiment. Prices remain above the key $21 level. However, XAG/USD faces a bearish outlook amid Fed expectations for rate hikes. 

Support is seen near the $21.00 level. A break of that would leave the support at the May 16th low of 20.84. Resistance is seen near the 10-day moving average near the 10-day moving average of 21.49.

Short-term momentum might turn positive as the fast stochastic might have a crossover buy signal.

The medium-term momentum turns positive as the histogram prints less negatively with the MACD (moving average convergence divergence). The trajectory of the MACD histogram is in positive territory, which reflects an upward trend in price movement.

USD/CAD Price Prediction – USD/CAD remained little changed despite the ease in oil prices

Key Insights

  • Gold prices held steady despite the equity sell-off. 
  • Treasury yields declined as investors rushed to bonds.
  • Oil prices fall as US companies plan to increase supply. 

USD/CAD ended the day in the red despite recovering from a drop after Canadian inflation figures. However, these figures pointing toward a more hawkish BoC have failed to underpin the Loonie.

The dollar rallies to two-decade highs as investors place bets longing the dollar. Benchmark yields erased gains as investors piled into bonds due to the sell off in stocks. 

The Dow and Nasdaq suffered immense losses today as poor earnings reports heightened concerns over inflation. The ten-year yield slid by 9 basis points today. Oil prices tumbled as US companies plan to raise output, which counters supply issues from the Russian oil embargo.

April housing starts declined by 0.2% amid rising mortgage rates. The 30-year loan rose to 5.3% last week from 2.94 a year ago. Spiraling inflation combined with high material prices has weighed on the housing market. 

Philadelphia Fed President Harker stated that the Fed will have two 50-basis point hikes in June and July at the FOMC meetings.

Technical Analysis

The USD/CAD held near the 1.287 level. A pullback in oil prices and worsening macroeconomic sentiment underpins the dollar. The currency pair has made a top and faces downward momentum. USD/CAD is headed for the 1.27s region. 

Resistance is seen near the 10-day moving average of 1.292. Support is seen near the May 5th low near 1.27. Short-term momentum is positive as the fast stochastic had a crossover buy signal. 

Medium-term momentum turns negative as the MACD line might generate a crossover sell signal. This scenario happens when the MACD line (the 12-day moving average minus the 26-day moving average) crosses the MACD signal line (the 9-day MA of the MACD line).

The trajectory of the MACD is in positive territory, which reflects an upward trend in price movement.

Silver Price Forecast – Silver Markets Rollover

Silver Markets Technical Analysis

Silver markets have fallen during the trading session on Wednesday as we continue to see the $22 level show its importance. The silver markets are highly susceptible to US dollar pressure, as it rises. The US dollar has shown signs of strength multiple times, and therefore one would think it should continue to be the case given enough time. However, the market will be noisy, as is typically the case with silver. After all, the silver market is extraordinarily volatile, so you do need to be cautious about the position size that you put on. Nonetheless, it is obvious that there is no real reason to be a buyer anytime soon.

If we do break above the $22 level, it is very likely that we will continue to see sellers above there anyway, as the trend is so firmly ensconced. The interest rates in the United States continue to push the US dollar higher, and therefore one would think that silver will succumb to a lot of pressure. Rallies at this point are to be sold into, and it is not until we clear the 50 Day EMA that I would consider this a potential turnaround.

Ultimately, I think it continues to be a “sell the rallies” situation, as the silver markets look like they have much further to go to the downside. The only thing I think you can count on at this point is volatility, and therefore you should take advantage of that but may have to look at shorter-term charts more than anything else. If we do break down below the bottom of the daily candlestick for Wednesday, it is likely we go looking towards the most recent low.

Silver Price Forecast Video 19.05.22

For a look at all of today’s economic events, check out our economic calendar.