Gold Price Prediction – Prices Consolidate Near All-time Highs as the Dollar Rebound

Gold prices consolidated near all-time highs, as the dollar started to rebound after tumbling for 7-consecutive weeks. US yields moved higher following a report from the Institute of Supply management which showed that manufacturing expanded at the fasted rate since March of 2019. The rebound in yields buoyed the greenback capping upward momentum for the yellow metal.

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Technical analysis

Gold prices consolidated just below all-time highs following last week’s 3.5% rise.  Support is seen near the 10-day moving average near 1,927. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum continues to flip flow back and forth between buy and sell signal. The fast-stochastic is printing a reading of 92 above the overbought trigger level of 80, which could foreshadow a correction. The RSI is printing a reading of 82, above the overbought trigger level of 70 which could foreshadow a correction.

ISM Manufacturing Rises More than Expected

U.S. manufacturing expanded in July at the fastest pace since March 2019. The Institute for Supply Management reported that its manufacturing index rose to 54.2 last month from 52.6. Expectations was for a reading of 53.6 median. The ISM’s measure of production increased in July to 62.1, the highest level since August 2018, and a gauge of orders climbed to 61.5, which was the strongest since September of that year.

Gold Price Forecast – Gold Markets Pull Back From Major Figure

Gold markets have broken above the $2000 level initially during trading on Monday but have pulled back from that psychologically important level. Ultimately, I think we go well beyond $2000, but it may take some time to get used to the idea. Furthermore, the market has been overextended for a while, so I am more than comfortable sitting on the sidelines and waiting for the gold markets to come back. That being said, if we get a daily close above the $2000 level then it is probably a signal that we are ready to continue.

Gold Price Predictions Video 04.08.20

To the downside I like the $1900 level for support, but I can also say the same thing about $1950. After all, that is an area that I think will attract a certain amount of attention due to the fact that there was a little bit of a gap there. Ultimately, gold is something that I have no interest in shorting and therefore it is a matter of being patient enough to take advantage of the opportunities when it becomes just a bit “cheap.” With that being said, the $1900 level is massive support, but even below there I think the absolute “floor” in the market is closer to the $1700 level.

The 200 day EMA sits right there, and of course between here and there we also have the 50 day EMA which is trading at roughly $1800. All things being equal, there is absolutely nothing on this chart that remotely suggests that you have any business trying to short gold. At this point the question is not whether to be longer short, but rather to own it or wait for cheaper pricing?

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

Silver Price Daily Forecast – Silver Failed To Get Above Resistance At $24.95

Silver Video 03.08.20.

Silver Finds Itself Under Pressure As U.S. Dollar Continues To Rebound

Silver pulled back closer to $24.00 as the U.S. dollar gained ground against a broad basket of currencies while gold corrected from recent highs.

The U.S. Dollar Index continued its rebound, putting pressure on precious metals and other commodities. The U.S. Dollar Index has managed to settle above the resistance at 93.5 and is trying to get above the 94 level.

If the U.S. dollar continues its upside move, silver may experience more pressure since stronger dollar makes it more expensive for buyers who have other currencies. In case the U.S. Dollar Index will be able to get above the 94 level, it will likely head towards the significant resistance at the 20 EMA at 94.90.

Meanwhile, spot gold made an attempt to test the $2000 level but failed to gain more upside momentum and pulled back closer to $1970. At this point, gold is trying to consolidate just below the $2000 level which is a healthy sign for bulls.

However, a continued rebound of the U.S. dollar may put additional pressure on gold and cause a correction which will be also bearish for silver.

Gold/silver ratio is forming a range between 80 and 85 while volatility decreases. Gold/silver ratio did not manage to immediately rebound after the major downside move that happened in July, which is a bullish development for silver.

Technical Analysis

silver august 3 2020

Silver failed to settle above the nearest resistance level at $24.95 and pulled back. The nearest support level at $24.00 has also been tested during today’s trading session.

Volatility may decrease in the upcoming trading sessions, and silver may find itself in a new trading range between support at $24.00 and resistance at $24.95.

However, this scenario is not guaranteed since silver volatility may increase as a result of rapid moves on the U.S. dollar front or a gold price breakout.

In case silver settles below the support level at $24.00, it will head towards the next support at $23.25.

A move above the nearest resistance at $24.95 will open the way to the test of the next resistance level which is located at recent highs at $26.20.

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

The Trifecta of Key Signals for Gold Miners

Nothing lasts forever, and the brightest flame burns itself out the fastest. That could very well apply to the current situation around PMs.

Speaking of indications pointing to the situation being excessive, let’s take a look at the USD Index.

Remember when in early 2018 we wrote that the USD Index was bottoming due to a very powerful combination of support levels? Practically nobody wanted to read that as everyone “knew” that the USD Index is going to fall below 80. We were notified that people were hating on us in some blog comments for disclosing our opinion – that the USD Index was bottoming, and gold was topping. People were very unhappy with us writing that day after day, even though the USD Index refused to soar, and gold was not declining.

Well, it’s the same right now.

The USD Index is at a powerful combination of support levels. One of them is the rising, long-term, black support line that’s based on the 2011 and 2014 bottoms.

The other major, long-term factor is the proximity to the 92 level – that’s when gold topped in 2004, 2005, and where it – approximately – bottomed in 2015, and 2016.

The USDX just moved to these profound support levels, and it’s very oversold on a short-term basis. It all happened in the middle of the year, which is when the USDX formed major bottoms on many occasions. This makes a short-term rally here very likely.

We even saw a confirmation from USD’s short-term chart.

The U.S. currency finally after a decisive short-term breakout. Back in March, the short-term breakout in the USD Index was the thing that triggered the powerful rally in it, as well as a powerful plunge in the precious metals market.

Consequently, based on this analogy, the implications for the near term are bearish for the PMs. Especially, when we consider the fact that Gold Miners Bullish Percent Index showed the highest possible overbought reading recently.

The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.

Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing has caused the Gold Miners Bullish Percent Index to move up once again for a few days. It then declined once again. We saw something similar also this time. In this case, this move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.

Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Given the situation in the USD Index, it seems that we’re seeing the same thing also this time.

On Friday, gold moved higher once again, but senior mining stocks refused to move to new highs. They didn’t manage to even erase their Thursday’s decline. The volume that accompanied this daily upswing was relatively low. This means that it’s likely that this is a counter-trend bounce, and not the bigger move higher.

Miners were the first to top, and the short-term breakout in the USD Index indicates that other PM markets are likely to follow.

Please note that the miners topped almost right at the vertex of the huge rising wedge pattern. Quoting last week’s analysis:

(…) huge rising wedge pattern is about to form a vertex today or tomorrow. The same rule that applies to triangles has implications also here. The vertex is quite likely to mark a reversal date. Given the overbought status of the RSI (given today’s upswing, it’s almost certain to move above 70 once again) as well as miners recent unwillingness to track gold during its continuous rally, it’s highly likely in my view that this will be a top.

Combine the USDX situation with Gold Miners’ Bullish Percent and vertex-based reversal, and you get a high likelihood of lower prices in miners next.

Thank you for reading today’s free analysis. Please note that it’s just a small fraction of today’s full Gold & Silver Trading Alert. The latter includes multiple details such as the interim target for gold that could be reached in the next few weeks.

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

Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager
Sunshine Profits: Analysis. Care. Profits.

* * * * *

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.

 

Price of Gold Fundamental Daily Forecast – Ripe for Correction During Dollar Short Squeeze

Gold futures are taking a breather on Monday from its tremendous rally to record highs in July. The catalyst behind the weakness is a stronger U.S Dollar that is weighing on foreign demand for the dollar-denominated precious metal. A sharp rise in 10-year U.S. Treasury yields is also weighing on gold prices after the benchmark hit a record low yield late last week.

At 13:03 GMT, December Comex gold futures are trading $1984.70, down $1.20 or -0.06%.

Dollar Jumps after Weakest Month in a Decade

The dollar is trading higher against a basket of major currencies on Monday as a squeezing-out of crowded short positions combined with safe-haven demand gave the U.S. currency some respite after its weakest monthly performance in ten years. The greenback lost more than 4% in July, its biggest monthly drop since September 2010.

Dollar Short-Squeeze

Speculators’ net shorts on the U.S. Dollar have soared to their highest since August 2011 at $24.27 billion, Reuters calculations and U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.

A partial squeezing out of that crowded short position may be the reason for the dollar’s rally and gold’s subsequent reversal to the downside earlier today.

Essentially, the dollar ran out of sellers. Traders could sense it because the downside movement was a bit cautious late last week. It seemed that nearly every short in the Forex market decided to cover at the same time on Friday, creating a tremendous reversal to the upside.

Treasury Yields Bounce Slightly from Last Week’s Record-Setting Drop

Probably exerting the most pressure on gold is a rise in U.S. Treasury yields after last week’s decline pushed some of the front-end rates to record lows.

Yields were pressed lower last week on the hopes of fresh fiscal stimulus from Congress, but members went home for the week-end without reaching deal. Policymakers are likely to have a deal in place this week, but it’s probably being priced into the market already.

Daily Forecast

We’re going to be keeping an eye on the U.S. Dollar, but an even closer watch of Treasury yields. Right now the dollar is going through the early phase of a short-covering rally that could lead to at least a 50% retracement of the recent sell-off. If this were to take place then gold could mirror the move with a 50% retracement of its current rally.

Traders shouldn’t fear a normal 50% to 61.8% correction in gold. In fact, they should embrace it because it would likely lead to a break back into a value area where it would become attractive to long-term investors.

The fundamentals are there for higher prices over the longer-term. However, over the short-run, I can build a case for a near-term correction.

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

Daily Gold News: Monday, August 3 – Gold’s Consolidation – a Topping Pattern?

The gold futures contract reached another new record high on Friday at the price level of $2,005.40. The market has slightly extended its recent advance again. The market gained 0.97%, but the closing price was at around $20 below the daily high. Gold reached the highest in history following U.S. dollar sell-off, among other factors.

Gold is 0.4% lower this morning as it is slightly retracing Friday’s advance. What about the other precious metals? Silver gained 3.66% on Friday and today it is 1.3% lower. Platinum gained 0.69% and today it is 0.3% higher. Palladium gained 0.49% on Friday and today it’s 1.2% higher. So precious metals trade within a short-term downward correction this morning. The gold price remains within a week-long consolidation along $1,950-2,000.

Friday’s Personal Income/ Personal Spending data release along with the sentiment numbers have been mixed. Today we will get the ISM Manufacturing PMI number at 10:00, among others. Expectations are at 53.6 – one point above the previous month’s release. The ISM Manufacturing PMI got back above the neutral level of 50 following steep declines in May and June.

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

Monday, August 3

  • 9:45 a.m. U.S. – Final Manufacturing PMI
  • 10:00 a.m. U.S. – ISM Manufacturing PMI, Construction Spending m/m, ISM Manufacturing Prices
  • All Day, Canada – Bank Holiday

Tuesday, August 4

  • 00:30 a.m. Australia – Cash Rate, RBA Rate Statement
  • 10:00 a.m. U.S. – Factory Orders m/m, IBD/TIPP Economic Optimism
  • 9:45 p.m. China – Caixin Services PMI

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

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

Paul Rejczak
Stock Selection 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.

 

Precious Metals Weekend Wrap-up August 1, 2020

Now that we have encouraging data, we should be able to make informed decisions concerning on how to move forward. Unfortunately, politicians are making this much worse than it needs to be. The damage they have done to the economy is immeasurable.

It’s reported that 55% of restaurants on Yelp have shut their doors for good. And some estimate that 33% of the hotels in the U.S. could go out of business. In my opinion, the economy is yet to feel the long-term consequences of this economic shutdown.

Gold reached new all-time highs on the back of a declining dollar. I expected a breakout above $2000, but not until 2021 or 2022. What happens next depends on the dollar. If the dollar stabilizes and turns higher, then gold should correct and begin to consolidate. If the dollar continues to crash, then gold could enter a runaway move higher.

The Fed announced no change in its interest rate policy on Wednesday and said it would do everything necessary to support the economy. Sometimes gold and the dollar reverse trends (top or bottom) just after a Fed decision. The dollar formed a bullish engulfing candle on Friday, supporting the potential for a reversal.

The gold cycle indicator remains pegged at 450, and gold is very overbought.

US DOLLAR

Gold is higher as a direct result of the crashing dollar. The dollar is incredibly oversold and due for a bottom, which would imply a top in gold. I’ve mentioned before how prices often reverse on or just after a crucial Fed meeting. The dollar formed a bullish engulfing candle on Friday, 2-days after Wednesday’s announcement. Closing above the 10-day EMA (currently 94.11) next week would sponsor a bottom.

GOLD WEEKLY

It’s rare for prices to slice through a significant resistance level without consolidating first. And for that reason, I’m suspicious of the recent breakout to new all-time highs. When momentum is strong, like now, prices will sometimes overshoot a major level. If this is a momentum overshoot, then gold should stay below $2050 and finally turn lower. A sustained advance above $2100 would signal a potential runaway move.

GOLD DAILY

Gold reached an intraday high of $2005.40 on Friday. Prices are very overbought, and the cycle indicator is maxed out at 450. The trend is well-overdue for a correction. A daily finish below $1971.40 would secure a swing high and signal a potential top.

SILVER

After breaking out above $20.00, silver exploded to our $26.00 target. Prices are overbought and due for a pullback. Closing below $22.50 would support a top. To extend this advance, prices would have to close above the $26.27 spike high.

PLATINUM

Platinum is the last precious metal to breakout to fresh highs. Prices would have to close above $1050 to signal a breakout. Whereas dropping below the cycle trendline would indicate a correction.

GDX

On Thursday, miners closed below Monday’s gap, issuing a potential exhaustion gap sell signal. Miners would have to close above $44.46 to reverse the short-term bearish signal. To confirm a multi-week correction – GDX would have to close below $36.87.

GDXJ

Juniors also closed below Monday’s gap, triggering a short-term sell signal – prices would have to close above $63.31 to reverse it. Otherwise, breaking below $50.00 would confirm the onset of a multi-week cycle correction.

SPY

Stocks consolidated throughout the week but managed to close above the short-term trendline on Friday. It looks like prices will attack the February 329 gap next week. Like gold, the trend is incredibly overbought and ready for a correction.

Have a safe and pleasant weekend.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

The Week Ahead – COVID-19, Economic Data and US Politics in Focus

On the Macro

It’s a busier week ahead on the economic calendar, with 59 stats in focus in the week ending 7th August. In the week prior, just 57 stats had been in focus.

For the Dollar:

It’s another busy week ahead on the economic data front.

In the 1st half, the ISM’s July private sector PMIs, ADP nonfarm employment change figures, and June factory orders are in focus.

We would expect Wednesday’s ISM Non-Manufacturing PMI and ADP Nonfarm Employment Change to have the greatest impact.

The focus will then to Thursday’s initial jobless claims and Friday’s nonfarm payroll numbers and unemployment rate.

Following some disappointing weekly jobless claims figures and the rise in COVID-19 cases, the labor market figures will be key.

For the service sector, any contraction in July, following a jump in productivity in June, would also weigh on riskier assets.

The Dollar Spot Index ended the week down by 1.15% to 93.349.

For the EUR:

It’s also another busy week ahead on the economic data front.

On Monday and Wednesday, July’s manufacturing and services PMIs are due out of Italy and Spain.

Finalized PMIs are also due out of France, Germany, and the Eurozone.

With Spain seeing a spike in new COVID-19 cases, expect some attention to the PMIs. Ultimately, however, the Eurozone’s services and composite will likely have the greatest impact.

The focus will then shift German factory orders for June, due out on Thursday.

At the end of the week, Germany remains in focus, with June’s industrial production and trade figures due out.

Barring disappointing numbers, June retail sales figures for the Eurozone should have a muted impact on Thursday.

The EUR/USD ended the week up by 1.05% to $1.1778.

For the Pound:

It’s a relatively busy week ahead on the economic calendar. July’s finalized private sector PMIs are due out and will garner plenty of interest.

Expect any downward revision to the Services PMI on Wednesday to have the greatest impact.

On Thursday, the focus will then shift to the BoE. More action is expected and the Bank may consider an extension to the suspension of banks paying dividends and buybacks.

While the BoE is in action, we can also expect any further updates on Brexit to also influence in the week.

The GBP/USD ended the week up by 2.27% to $1.3085.

For the Loonie:

It’s a relatively busy week ahead on the economic calendar.

On Wednesday, June’s trade figures are due out ahead of July employment numbers on Friday.

Expect the employment figures to have the greatest impact, however.

Barring dire numbers, the Ivey PMI for July should have a muted impact on the Loonie on Friday.

Away from the stats, COVID-19 and geopolitics will continue to influence crude oil prices and risk sentiment.

The Loonie ended the week up by 0.02% to C$1.3412 against the U.S Dollar.

Out of Asia

For the Aussie Dollar:

It’s a relatively busy week ahead for the Aussie Dollar.

At the start of the week, the Manufacturing Index figures are due out ahead of a busy Tuesday.

We would expect manufacturing PMIs from China, the EU, and the U.S to have a greater impact, however, on Monday.

The focus will then shift June trade and retail sales figures due out on Tuesday. Expect the retail sales figures to have the greatest impact. The RBA continues to rely on consumer spending to support the economy. Weak numbers will be a test for the Aussie Dollar.

For the week, however, the main event is the RBA monetary policy decision on Tuesday.

Following the spike in new COVID-19 cases, will the RBA remain optimistic about the economic recovery?\

Any dovish chatter and the Aussie Dollar could eye sub-$0.70 levels. At the end of the week, the RBA’s statement on monetary policy will also draw interest.

The Aussie Dollar ended the week up by 0.53% to $0.7143.

For the Kiwi Dollar:

It’s another quiet week ahead on the economic calendar.

2nd quarter employment figures are due out on Wednesday. The markets will likely be forgiving to an extent, with COVID-19 expected to have an impact on employment.

With economic data on the lighter side, private sector PMIs from China, the EU, and the U.S will influence.

Expect geopolitics and COVID-19 news to also have an impact in the week. Any signs of a slowdown in new cases globally and expect support to kick in.

The Kiwi Dollar ended the week down by 0.18% to $0.6629.

For the Japanese Yen:

It is a busy week ahead on the economic calendar.

Finalized 2nd quarter GDP and July’s manufacturing PMI numbers are due out on Monday.

The focus will then shift to July’s service PMI on Wednesday and June household spending figures on Friday.

While the stats will influence sentiment towards BoJ monetary policy, the Yen will remain at the mercy of COVID-19 and geopolitics.

The Japanese Yen ended the week up by 0.29% to ¥105.83 against the U.S Dollar.

Out of China

It’s a relatively busy week ahead on the economic data front.

July’s private sector PMIs are due out on Monday and Wednesday. Expect the figures to influence risk appetite in the week.

On Friday, July trade figures will also garner plenty of attention. While exports remain the main area of focus, any sizeable fall in imports would test risk appetite on the day.

Away from the economic calendar, any chatter from Beijing will also need monitoring.

The Chinese Yuan ended the week up 0.62% to CNY6.9752 against the U.S Dollar.

Geo-Politics

UK Politics:

Brexit will remain in focus. Talks are set to continue through August and September ahead of an EU Summit in October.

60 days may sound like a lot but when considering the lack of progress over 4-years…

A light economic calendar and Brexit chatter have provided the Pound with support. We may even see the markets brush off the chances of a hard Brexit.

Getting on with it seems to be the key desire now rather than dragging it out any longer. Either way, we’re not expecting Johnson and the team to give too much away…

U.S Politics:

Last week, the Republicans showed signs of fragmentation. As Presidential Election stress builds, we could see more fractures as Trump attempts to distract voters.

The immediate issue at hand, however, is the COVID-19 stimulus package. Any failure to deliver will weigh on the Dollar. Labor market conditions have not improved and the 2nd wave has shown little sign of slowing. A lack of benefits for the unemployed will raise more issues than a fall in household spending. We have already seen social unrest…

The Coronavirus:

It was yet another bad week, with the number of new COVID-19 cases continuing to rise at a marked pace.

From the market’s perspective, the 3 key considerations have been:

  1. Progress is made with COVID-19 treatment drugs and vaccines.
  2. No spikes in new cases as a result of the easing of lockdown measures.
  3. Governments continue to progress towards fully opening economies and borders.

Last week, we saw a number of countries including Hong Kong and the UK reintroduce containment measures. Hopes of progress towards a vaccine had limited the damage last week. In the week ahead, however, the numbers will need to ease off to avoid spooking the markets.

At the time of writing, the total number of coronavirus cases stood at 17,981,937. Monday to Saturday, the total number of new cases increased by 1,782,490. Over the same period in the previous week, the total number had risen by 1,531,149.

Monday through Saturday, the U.S reported 447,236 new cases to take the total to 4,762,945. This was up marginally from the previous week’s 417,070

For Germany, Italy, and Spain, there were 22,814 new cases Monday through Saturday. This took the total to 793,804. In the previous week, there had been 17,083 cases over the same period. Spain accounted for 16,101 of the total new cases in the week.

The Weekly Wrap – Economic Data, the FED, and Trump Sank the Dollar

The Stats

It was a busy week on the economic calendar, in the week ending 31st July.

A total of 56 stats were monitored, following the 41 stats from the week prior.

Of the 56 stats, 31 came in ahead forecasts, with 24 economic indicators coming up short of forecasts. Just 1 stat was in line with forecasts in the week.

Looking at the numbers, 19 of the stats reflected an upward trend from previous figures. Of the remaining 37, 35 stats reflected a deterioration from previous.

For the Greenback, it was a 6th consecutive week in the red. In the week ending 31st July, the Dollar Spot Index fell by 1.15% to 93.349. In the week prior, the Dollar had fallen by 1.57%.

The continued slide through the month of July left the Dollar Spot Index down by 4.15% for the month.

Dire economic data, the continued spread of COVID-19, and a dovish FED delivered the loss. Adding to the Dollar angst in the week was Trump’s Presidential Election delay tweet on Thursday…

According to a Reuters report, U.S Dollar net shorts surged to the highest in 9-years, delivering the largest monthly loss Since Sept-2010.

Looking at the latest coronavirus numbers

At the time of writing, the total number of coronavirus cases stood at 17,731,750 for Friday, rising from last Friday’s 15,930,779 total cases. Week-on-week (Saturday thru Friday), the total number of cases was up by 1,801,071 on a global basis. This was higher than the previous week’s increase of 1,741,556 in new cases.

In the U.S, the total rose by 454,463 to 4,702,774. In the week prior, the total number of new cases had risen by 478,299.

Across Germany, Italy, and Spain combined, the total number of new cases increased by 22,753 to bring total infections to 793,804. In the previous week, the total number of new cases had risen by 17,404. Spain alone reported 16,101 new cases in the week.

Out of the U.S

It was a busy week on the economic data front.

Key stats included July consumer confidence, the weekly jobless claims, and 2nd quarter GDP figures.

The stats were skewed to the negative. Consumer confidence deteriorated in July, as a result of the 2nd wave of the pandemic. Initial jobless claims increased for a 2nd consecutive week, with the U.S economy contracting by 32.9% in the 2nd quarter.

At the end of the week, July consumer sentiment figures were also revised down.

There were some positives, however. Durable and core durable goods continued to rise in June.

Chicago’s PMI returned to expansion in July, with personal spending rising for a 2nd consecutive month in June. These were good enough to give the Dollar much-needed support at the end of the week.

In the equity markets, the NASDAQ and S&P500 rose by 3.69% and by 1.73% respectively. The Dow bucked the trend, however, falling by 0.16%.

Out of the UK

It was a particularly quiet week on the economic calendar, with no material stats to provide the Pound with direction.

A lack of economic data contributed to the upside in the Pound that benefitted from Dollar weakness. News of the government reintroducing lockdown measures in the North weighed at the end of the week, however.

In the week, the Pound rallied by 2.27% to $1.3085 in the week, following on from a 1.80% gain from the previous week. The FTSE100 ended the week down by 3.69%, following on from a 2.65% loss from the previous week.

Out of the Eurozone

It was a busy week on the economic data front.

In a quiet 1st half of the week, Germany’s IFO Business Climate Index figures for July provided support on Monday.

The focus then shifted to 2nd quarter GDP numbers. France, Germany, and the Eurozone reported particularly dire 2nd quarter numbers.

The German economy contracted by 10.1%, the French economy by 13.8%, and the Eurozone economy by 12.1%.

It wasn’t enough to send the EUR into the red, however, as the U.S delivered darker numbers.

For the week, the EUR rose by 1.05% to $1.1778, following a 2.00% rally from the previous week. A 0.58% pullback on Friday limited the upside for the week.

For the European major indexes, it was another bearish week. The DAX30 slid by 4.09%, with the CAC40 and EuroStoxx600 falling by 3.49% and by 2.98% respectively.

For the Loonie

It was a quiet week on the economic calendar.

Economic data included May GDP and June RMPI numbers at the end of the week.

The stats were positive, with the Canadian economy expanding by 4.5% in May, following April’s 11.7% contraction. In June, the RMPI rose by a further 7.5%, following a 16.4% jump in May.

While the other majors lost ground against the Greenback on Friday, the stats delivered support at the end of the week.

The Loonie rose by 0.02% to end the week at C$1.3412 against the Greenback. In the week prior, the Loonie had rallied by 1.22% to C$1.3415.

Elsewhere

It was a mixed week for the Aussie Dollar and the Kiwi Dollar.

In the week ending 31st July, the Aussie Dollar rose by 0.53% to $0.7143, while the Kiwi Dollar fell by 0.18% to $0.6629. A 1.04% slide on Friday, left the Kiwi in the red for the week.

For the Aussie Dollar

It was a relatively quiet week for the Aussie Dollar.

Inflation and private sector credit figures delivered mixed results in the week.

In the 2nd quarter, consumer prices slid by 1.9%, with prices down by 0.30% year-on-year.

Final delivery numbers were not much better, with the Producer Price Index falling by 1.20% in the 2nd quarter. Year-on-year, the index fell by 0.40%.

The numbers were better than forecasts, which propped up the Aussie Dollar.

Private sector credit disappointed, however, falling by 0.3% in June.

While the Aussie Dollar found support against the Greenback, the latest COVID-19 outbreak pinned back the Aussie.

For the Kiwi Dollar

It was another relatively quiet week on the economic data front.

While stats included building consent and business confidence figures, the focus was on the business confidence figures.

A marginal improvement in business confidence did little to support the Kiwi, however.

In July, the ANZ Business Confidence Index rose from -34.4 to -31.8.

According to the latest ANZ Report,

  • A net 9% of firms expect weaker economic activity in their own business, rising from -26% in June.
  • The retail sector drove the recovery, while the agriculture sector was the most negative.
  • 31% of firms say they intend to lay off staff, and 24% say they have less staff than a year ago.

For the Japanese Yen

It was a relatively quiet week on the economic calendar.

Retail sales continued to fall in June. Following a 12.5% slump in May, retail sales fell by 1.20%.

Industrial production delivered hope, however, rising by 2.7% in June, according to prelim figures. In May, production had tumbled by 8.9%.

A weakening U.S Dollar stemming from particularly dire economic data and a dovish FED supported the Yen.

The Japanese Yen rose by 0.29% to end the week at ¥105.83 against the Greenback. A 1.05% slide on Friday, cut the gains from earlier in the week. In the week prior, the Yen had risen by 0.82%.

Out of China

It was a quiet week on the economic data front.

July’s NBS private sector PMI figures delivered mixed results on Friday.

While the Non-Manufacturing PMI slipped from 54.4 to 54.2, the Manufacturing PMI rose from 50.9 to 51.1.

With Beijing and Washington silent, following the previous week’s diplomatic spat, the Yuan recovered to sub-CNY7 levels.

In the week ending 24th July, the Chinese Yuan rose by 0.62% to CNY6.9752 against the Dollar. In the week prior, the Yuan had fallen by 0.37%.

The CSI300 rallied by 4.20%, while the Hang Seng falling 0.45%, as a 2nd wave of the pandemic hit HK.

Gold Price Futures (GC) Technical Analysis – Protect the Downside, the Upside Will Take Care of Itself

Gold futures closed higher on Friday after hitting a new contract high early in the session. The market gave back some of its gains when Treasury yields rose slightly and the U.S. Dollar recovered from more than a two-year low.

Spot gold also reached a new all-time high with the market posting it best month since February 2016, and its fifth straight positive month.

Despite Friday’s new high, traders looked a little cautious with the new high coming in only $5.40 higher than the previous high earlier in the week before the intraday pullback. This suggests a shaky outlook over the short-run.

However, the longer-term picture remains bullish with the market tracking real interest rates that are hovering near zero percent. Extreme weakness in the U.S. Dollar also helped buoy gold prices last month with the greenback posting its biggest monthly drop in almost a decade.

On Friday, December Comex gold futures settled at $1994.00, up $27.20 or +1.38%.

Daily December Comex Gold

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. The uptrend was reaffirmed on Friday when buyers took out $2000.00. A trade through $1819.30 will change the main trend to down. This is highly unlikely, but investors should be aware of the potentially bearish closing price reversal top.

The minor range is $1927.50 to $2005.40. Its 50% level at $1966.50 is the nearest support.

The short-term range is $1819.30 to $2005.40. Its 50% level at $1912.40 is another potential support level.

This is followed by a series of retracement levels at $1896.90, $1888.70, $1871.20 and $1861.20.

Short-Term Outlook

There are no minor bottoms in the picture, but $1952.30 has the characteristics of a minor bottom. Another level to watch is $1927.50. This low was put in when gold dropped $72.50 on July 28.

If a top is forming then the market should stair-step down, first taking out $1966.50 then $1952.30. These are only minor levels but novice traders like to put ill-advised stops under these levels. The next such level is $1927.50.

The value levels are where the buyers are lurking. They come in at $1912.40 and the support cluster at $1896.90 and $1888.70.

In other words, $1966.50 $1952.30 and $1927.50 are weak support levels. The best is $1896.90 to $1888.70.

The decision for short-term traders is to chase the market higher or play for a pullback into value.

Gold Price Prediction – Prices Rise Closing the Week on an Up Note

Gold prices finished the week on an up note, rising slightly and closing the week up 3.5%. This came as the dollar finally rebounded after making a lower low, and closing down for the week. Personal spending increased for a second consecutive month according to a report on Friday from the Commerce Department. This followed Thursday GDP report that showed the US economy declined nearly 33% for the Q2.

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Technical analysis

Gold prices continued to rally, closing at an all-time. Prices rose by 3.5% for the week and finished on an up note.  Support is seen near the prior highs at 1,921 and then the 10-day moving average near 1,911. Medium-term momentum has turned positive and continues to accelerate higher as the MACD (moving average convergence divergence) histogram is printing in the black with an upward sloping trajectory points to higher prices. Short-term momentum has turned positive after recently turning negative. The fast-stochastic is printing a reading of 91 above the overbought trigger level of 80, which could foreshadow a correction. The RSI is printing a reading of 83, above the overbought trigger level of 70 which could foreshadow a correction.

Personal Spending Rose

Consumer spending, rose 5.6% last month after a record 8.5% jump in May as more businesses reopened. Expectations had been for consumer spending to rise by 5.5% in June. When adjusted for inflation, consumer spending increased 5.2% last month after surging 8.4% in May. Personal income dropped 1.1% last month after decreasing 4.4% in May. Wages increased 2.2% after rebounding 2.6% in May. The saving rate fell to a still-high 19% from 24.2% in May.

Gold Weekly Price Forecast – Gold Markets Touch Major Level

Gold markets have rallied significantly during the course of the week, touching the $2000 level. That level has caused a significant amount of resistance on short-term charts, as Friday started to see sellers get involved to take profits. I think at this point we are likely to see a pullback from here and eventually value hunting again. However, the market cannot go straight up in the air forever, so we need to be cautious, but I also recognize that looking for some type of pullback is the only way to trade this market. The Federal Reserve of course continues to show signs of flooding the market with greenbacks, and that could continue to push the gold market higher.

Gold Price Predictions Video 03.08.20

Longer-term, I think that gold goes much higher, perhaps as high as $3000 but obviously we need to take a bit of a break here in order to build up the necessary momentum. There will be a lot of “FOMO” out there as quite a few traders have missed this move. Regardless, only the foolhardy would jump in and start selling, because quite frankly this is a market that is extraordinarily bullish, and therefore a simple bit of patience could go long way in order to find value that will be extraordinarily profitable. I believe that volatility is coming, but that should offer plenty of opportunity if you can recognize it. You will probably need to look on the daily chart in order to take advantage of it though. Again, selling is not an option.

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

Gold Price Forecast – Gold Markets Continue Upward Grind

Gold markets have rallied significantly during the trading session on Friday, reaching towards the $2000 level before pulling back. I think this could be the beginning of a bit of profit-taking and it should not be surprising at all that the markets were pulling back due to the fact that we were heading into the weekend. After all, there have been good profits to be had in the gold markets, so there is no reason to simply let them disappear.

Gold Price Predictions Video 03.08.20

Nonetheless, I am looking for a buying opportunity underneath and will try to find some type of supportive candlestick that I can take advantage of. The uptrend line comes into play, just as the 20 day EMA will be. Ultimately, we could just bust above the top of the candlestick for the day, but I do not like that trade, because then gold becomes extraordinarily parabolic, something that I am not a big fan of dealing with.

Look for value, it is the best way to trade this market and quite frankly it is probably the best way to trade in the market. Simply trading with the trend is doing the same thing, because you are buying things when they are a bit “cheap” or selling things when they become a bit “expensive.” That is the big secret to trading: recognizing that it makes no sense to try to outsmart the market. Yes, there might be an opportunity for selling here to make a bit of money, but it is much less stressful simply go with where the market wants to go longer term. The Federal Reserve will ensure that we go higher.

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

Silver Price Daily Forecast – Silver Attempts To Get Back Above $24.00

Silver Video 31.07.20.

Silver Tries To Rebound After The Recent Pullback

Silver tries to settle back above $24.00 as gold continues its upside move while the U.S. dollar is flat against a broad basket of currencies.

The U.S. Dollar Index has recently declined below the 93 level but found support near 92.5 and is attempting to get back above 93.

U.S. dollar weakness is bullish for precious metals as it makes them cheaper for investors who have other currencies, and the major decline of American currency has certainly helped the rally in gold and silver.

However, the U.S. dollar is clearly oversold against a broad basket of currencies so there is a significant risk of a pullback which may put some pressure on precious metals.

Meanwhile, gold continues its upside move, which is bullish for silver. Gold futures have even touched the $2000 level while spot gold is yet to break above $1985.

Gold/silver ratio faced resistance below the 85 level and pulled back below 82. Gold/silver ratio’s RSI has returned back into the moderate territory so gold/silver ratio may continue the downside trend in case the right catalysts emerge.

In the near term, silver trading will likely be impacted by the outcome of coronavirus aid package negotiations in the U.S. Successful negotiations may provide material support to the American currency, which will be bearish for silver.

Technical Analysis

silver july 31 2020

Silver faced resistance near $24.50 and is pulling back. However, silver still maintains chances to settle above $24.00 and get to the test of the nearest resistance at $24.50.

In case this test is successful, silver will head towards the next resistance level at $24.95. A move above $24.95 will open the way to the recent highs at $26.20.

On the support side, the nearest support level is located at $23.25. A move below this level will likely lead to increased downside momentum, pushing silver towards the major support at $22.30.

At this point, silver is set for choppy trading action after the major upside move. For now, silver will likely stay in the range indicated by the recent wild trading day when silver touched resistance at $26.20 and support at $22.30.

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

Daily Gold News: Friday, July 31 – Gold at New Record but Precious Metals Mixed

The gold futures contract reached another new record high of $1,987.30 on Thursday, as it slightly extended its recent advance again. The market gained 0.69%, but the closing price was $20 below the daily high. Gold reached the highest in history following U.S. dollar sell-off, among other factors.

Gold is 0.9% higher this morning as it is trading along the new record high. What about the other precious metals? Silver lost 3.94% on Thursday and today it is 2.1% higher. Platinum lost 4.79% and today it is 0.3% lower. Palladium lost 5.59% on Thursday and today it’s 1.0% lower. So precious metals are mixed this morning.

Yesterday’s U.S. Advance GDP number has been slightly better than expected. However, the economy contracted by a stunning 32.9% in the second quarter. The Unemployment Claims number surpassed 1.4 million again.

Today we will get Personal Income/ Personal Spending release at 8:30 a.m. The Chicago PMI will be released at 9:45 a.m. and at 10:00 a.m. we will get the revised Michigan Sentiment number.

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

Friday, July 31

  • 8:30 a.m. U.S. – Personal Spending m/m, Personal Income m/m, Core PCE Price Index m/m, Employment Cost Index q/q
  • 8:30 a.m. Canada – GDP m/m, IPPI m/m, RMPI m/m
  • 9:45 a.m. U.S. – Chicago PMI
  • 10:00 a.m. U.S. – Revised UoM Consumer Sentiment

Thank you for reading today’s free analysis. We hope you enjoyed it. If so, we would like to invite you to sign up for our free gold newsletter. Once you sign up, you’ll also get 7-day no-obligation trial of all our premium gold services, including our Gold & Silver Trading Alerts. Sign up today!

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

Paul Rejczak
Stock Selection 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 – Plunge in Yields Pushes Gold to Biggest Monthly Gain in 8 Years

Gold futures edged to a new contract high and spot gold moved to a new all-time high on Friday with both headed for their biggest monthly gain in 8-1/2 years as the impact of the worsening coronavirus pandemic on the U.S. economy hammered the dollar, prompting foreign investors to buy dollar-denominated gold.

At 11:25 GMT, December Comex gold is trading $1991.90, up $25.10 or +1.28%.

The primary driver of this month’s rally in gold has been the plunge in U.S. Treasury yields. Prices are also being influenced by a steep drop in the U.S. Dollar Index. Falling interest rates and a stronger Euro are combining to keep the downside pressure on the greenback.

The catalysts moving multiple markets in July were expectations of more fiscal and monetary stimulus. However, the fiscal stimulus is still hung up in Congress and the Federal Reserve is not likely to make a major move until September. Nonetheless, the bets are in that the government and the Fed will get it done.

Meanwhile, the economic data remains gloomy; putting the V-shaped recovery very much at risk and gold is seeing the benefit from that. U.S. data showed the deepest economic contraction in at least 73 years in the second quarter and weekly unemployment claims continued to rise. The dollar was also hurt by President Donald Trump raising the possibility of delaying the November presidential election.

In other news, money managers allocated $3.9 billion into gold, the second largest weekly inflow ever, Bank of America said on Friday.

We expect the short-term to be shaky because traders are going to be a little more cautious as prices straddle the $2000 level. Longer-term investors can just sit back and relax because favorable conditions are likely to prevail until there is a successful coronavirus vaccine. Meanwhile, the inability to contain the spread of COVID-19 is likely to continue to stoke the bullish flames.

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

Gold Price Prediction – Prices Slip Despite a Decline in the Greenback as GDP Tumbles

Gold prices broke a streak of 9-consecutive higher closes, declining slightly following the larger than expected decline in US GDP. The dollar index continued to decline, as US yields moved lower, with the 10-year yield closing below 55-basis points. The recent downward trend in the US dollar is likely to buoy the yellow metal

Technical Analysis

Gold prices eased on Thursday after rising for 9-consecutive days. Prices are poised to close at a new monthly all-time high breaking out. The last time this occurred in 2008, gold prices more than doubled rising from $700 per ounce to $1921 per ounce 4-years later. This would target more than 5,200 on gold. Support is seen near the breakout level at $1,921 and then the 10-day moving average at $1895. Short-term momentum has turned negative as the fast stochastic recently generated a crossover sell signal. The RSI has also turned over and is printing a reading of 80, above the overbought trigger level of 70 which could foreshadow a correction.

Q2 GDP Contracts Sharply

Second-quarter GDP plunged the most in history contracting by 32.9% on a year over year basis according to the Commerce Department’s first reading on US growth. Economists had been looking for a drop of 34.7%, which means that despite the decline it was better than expected. With Q1 growth down 5% this number officially put the US economy in a recession. This news is not good for the incumbent President. No president in modern history has won reelection while there was a recession.

Precious Metals Warn Of Increased Volatility Ahead

Our trading team witnessed a big drop in Platinum and Palladium prices early this morning while Gold and Silver continued to push moderately higher.  We began to question this move and investigate any historical relevance to previous patterns.  Our research team pointed out that both Platinum and Palladium rolled lower just 3 to 4 days before the breakdown in the US stock markets on February 24, 2020, while Gold and Silver were reaching recent price peaks.  Could the patterns in precious metals be a warning of another potential volatility spike and price decline in the near future?

ARE METALS PATTERNS PREDICTING A BIG DOWNSIDE PRICE EVENT?

Our research team created the charts below to help highlight the pattern that we are seeing in Precious Metals right now.  First, we highlighted February 24, 2020, with a light blue vertical line to more clearly illustrate where the markets initiated the COVID-19 breakdown event.  Next, we drew shaded rectangles around new downside price rotation levels that took place near this peak in the US stock markets.  Lastly, we drew a red line that highlights the subsequent price decline that took place in Precious Metals as the markets tanked in late February and early March 2020.

The current downside price move in Platinum and Palladium are very interesting because it appears Platinum and Palladium both initiated a downside/contraction price event just 3 to 4 days before Gold and Silver, as well as the rest of the US stock market, began to collapse on February 25, 2020.  You can clearly see in the bottom two charts that Platinum and Palladium initiated a downside price correction a few days before both Gold and Silver reached their peak levels and began to move lower.  Once this peak rotation took place, all four of the major metals groups moved moderately lower for about 7 days before pausing, then collapsed even further.

Our researchers believe the current setup in Platinum and Palladium may be mirroring the February 2020 peak rotation and warning that a massive volatility event and downside price contraction event may be setting up and just days away from initiating.

The breakdown in Precious Metals at a time when the US stock market is crashing is usually a result of margin calls – where traders experience losses in their trading accounts and much liquidate Precious Metals positions to cover these losses.  This time, the downside event in Precious Metals may not be as deep or exaggerated as the February/March collapse.  Skilled traders have already positioned their accounts to avoid margin calls.  Only the novice traders may be in a position to experience this type of event in the near future.

HOW DEEP WILL IT GO?

Our researchers believe any future downside event in precious metals will likely stall near the recent support levels on these charts and immediately rotate back into a bullish trend because fear and greed won’t allow metals to fall too far before greedy traders try to scoop up these positions at discounted price levels. Our Support levels for the four Precious Metals shown are:

Silver: $19 to $21
Gold: $1780 to $1820
Platinum: $750 to $850
Palladium: $1915 to $2090

We believe any attempt to reach these levels in any of these four various Precious Metals would present a very strong buying opportunity for skilled technical traders.  If it were to happen while a US stock market volatility event was taking place and/or the US stock market began a new downside price decline, then skilled traders should understand we may be seeing a similar type of price rotation event to the one that took place in February/March 2020 – representing a fantastic trading opportunity for those lucky enough to take advantage of the discounted price levels.

This next chart highlights what we believe may be the downside price event as it potentially takes place over the next 10 to 20+ days. Pay special attention to the differences in how Silver, Gold, Platinum, and Palladium react to the fear event and where real opportunity exists near the end of this potential event.  Platinum and Palladium will likely fall 15% to 25% where Gold may fall only 8% and Silver may fall 15% to 20% before bottoming.

As technical traders, we can’t pass up an opportunity like this when Precious Metals gift us with a potential 15% to 45%+ rotation in price that should be moderately easy to trade given our expectations.  If this event takes place as we have described, skilled technical traders could begin to acquire smaller positions near our target levels, then wait to acquire bigger positions as the bottom sets up.  Take a look at how Gold and Silver rallied after the February/March collapse – Gold rallied back to new highs within 45 days whereas Silver rallied higher over 4+ months, then broke higher just recently on a huge upside breakout move.  Platinum and Palladium rotated more diligently throughout a 90-day span – never really reaching new highs after the peak in February 2020.

The reality of patterns like this is they are fun and exciting to find at this early stage of the setup.  We’re not 100% confident this pattern will play out as we expect yet – but we believe the probability is high that a volatility event is about to take place and that Precious Metals could react very similarly to the February/March 2020 price reactions again.

Quick Video Clip On Silver & Gold Predictions

As technical traders, we love this type of “telegraphed event” – even if it does not take place exactly as the previous event took place.  It means we have an opportunity to take advantage of increased volatility and price rotation in one of our favorite sectors – METALS.  Get ready for this move if we are correct – it may be your last chance to buy Gold and Silver at deep discounts for quite a while.

Get our Active ETF Swing Trade Signals or if you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Passive Long-Term ETF Investing Signals which we are about to issue a new signal for subscribers.

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

Chris Vermeulen
Chief Market Strategist
Founder of Technical Traders Ltd.

NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research.  It is provided for educational purposes only.  Our research team produces these research articles to share information with our subscribers in an effort to try to keep you informed of trends and our research.  Visit our web site at www.thetechnicaltraders.com to learn how to take advantage of our members-only research and trading signals.

 

Gold Price Forecast – Gold Markets Continue to Look Very Bullish

Gold markets initially gapped higher to kick off the trading session on Thursday but continue to look very bullish as we have recovered most the law losses. With that being the case, it is likely that we will continue to see the gold markets attract buyers every time the dip, and quite frankly with the Federal Reserve out there doing what they are doing to liquefy the markets it is going to drive down the value of the US dollar, one of the biggest drivers of gold.

Gold Price Predictions Video 31.07.20

Underneath, the $1850 level most certainly will be supported, and I think a move towards that area would bring in a lot of value hunters. We are parabolic at the moment, so if you are buying gold here you are simply playing a dangerous game. Looking for value is absolutely paramount in this business, especially as we are approaching the crucial $2000 level. I do believe that eventually we break above $2000, but that does not mean we do it straightaway. With that being the case, I like the idea of buying dips, but we have not had a serious one in a couple of weeks.

The uptrend line underneath is slicing through the $1850 level, just as the 20 day EMA is. This is a market that is running away, and these runaway markets almost always give a nice opportunity to pick up value sooner or later. You do not want to be the “back holder” in this market, because it has gotten so far ahead of itself that the pullback will almost certainly be brutal. However, shorting this market is essentially financial suicide.

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

Gold Price Forecast – Gold Miners Flashing A Potential Sell

Gold futures tested $1998.40 yesterday, and we see the potential for a post-Fed meeting pullback in precious metals. Gold miners will often lead the metals into key turning points. Here are the levels I am watching in GDX.

GDX DAILY CHART (10:30AM): If GDX closes below $41.70, I see the potential for a top at $44.46. A subsequent breakdown below the mid-July pivot ($36.87) would confirm an intermediate cycle top. If confirmed, expect a multi-week correction back towards the $30.00 level.

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Our intermediate Gold Cycle Indicator is at max cycle topping (450), supporting a near-term peak in precious metals. A correction here would trigger a September buying opportunity.

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AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

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