Silver Price Forecast – Silver Markets Show Signs of Exhaustion

Silver markets have gotten a bit overextended during the trading session again on Monday, giving back some of the gains. Ultimately, this is a market that I think needs to find either some type of stability, or some type of value in order to continue the uptrend. I do believe that longer-term we are going higher but that huge candlestick from last week I think is defining the range right now. That means that $26 on the top will be the ceiling, while the basement is closer to the $22.55 level. All things being equal though, I do think that at the very least we need to cool off a bit and pull back in order to consolidate, or perhaps even break down a bit from here.

SILVER Video 04.08.20

Either way, I have no interest whatsoever in trying to short this market, as it is far too strong. Furthermore, the Federal Reserve continues to work against the value of the greenback and that of course works for the silver market itself. If that is going to be the case, then I believe that silver is going to go much higher over the longer term, but we may have simply just run out of momentum for the short term. That is okay, the market can go straight up in the air forever so it makes quite a bit of sense that we would have to give back some here. Being patient will be the best way to trade this market, as chasing the trade right now would be very dangerous.

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.

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.

* * * * *

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.

Silver Weekly Price Forecast – Silver Markets Showing Signs of Gravity

Silver markets have gone straight up in the air over the course of the week, showing signs of strength and breaking above the $26 level. By doing so, it was an extraordinarily bullish move but at the end of the day we see that the market has given back quite a bit. I think at this point it is likely that we will continue to see bullish pressure eventually, but some profit-taking is probably going to be what we see initially.

SILVER Video 03.08.20

While we have not formed a complete shooting star, the candlestick is close enough to that to suggest that we are going lower. The $20 level underneath should be the “floor” in the market, so I would be a bit surprised to see this market break through there. If it does, that would of course be a very negative sign, but if we get down there, I am more than willing to take the chance on that position. To be honest though, I do not think we get that low and I think $22 is probably a little bit more likely.

On the other hand, if we break above the top of the candlestick it is likely that we then continue to go higher but only for the short term as it would be a bit of a “blow off top.” Silver has been extraordinarily volatile and bullish as of late, but sooner or later gravity had to come back into play. I will not short this market, but I am more than willing to be patient enough to take advantage of value when it appears.

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

Silver Price Forecast – Silver Markets Continue to Grind

Silver markets are obviously very bullish, but at this point they might be a bit overbought. I think that it is only a matter of time before we find enough value on a pullback to get long again but we clearly have not had it yet. In the short term, it looks like we are going to go sideways in general, looking at the $24 level. Ultimately, this is a market that I think has plenty of support underneath and I would like to see a certain amount of support underneath to take advantage of.

The $20 level underneath is the “floor” in the market, and I think that there will be plenty of buyers in that area if we were to somehow get down there. Ultimately, I like the idea of buying dips and will continue to take advantage of them as they occur. Longer-term, I believe that we are going to go much higher.

SILVER Video 03.08.20

The Federal Reserve continues to flood the market with greenbacks and therefore it is likely that the precious metals markets continue to see a lot of upward pressure. Quite frankly, I do not even have a scenario where I would be a seller, and therefore I think that the dips will continue to attract a lot of attention. To the upside, we could go as high as $30 over the next several weeks but clearly, we have gotten ahead of ourselves in the short term. At the very least we need to grind sideways in order to get comfortable if we for some reason cannot get that pullback.

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.

Silver Price Forecast – Silver Markets Give Back a Bit

Silver markets pulled back a bit during the trading session on Thursday as we reached towards the $23 level early in the day. Ultimately, silver was being affected by a stronger US dollar, but that is a temporary situation. Quite frankly, this is a market that you should never consider selling, at least not anytime soon and considering that the Federal Reserve is looking to liquefy the markets going forward, it is a bit difficult to understand how somebody with think shorting silver is a good idea. Yes, it will probably fall rather hard at one point or another, but ultimately, we should see the buyers takeover. I think looking for dips makes the most sense and I would be especially interested near the $22 level.

SILVER Video 31.07.20

The $20 level underneath should continue to be very supportive, and if we would somehow get down there it is likely that we could find plenty of buying pressure. I think at this point the Federal Reserve will continue to add liquidity to the markets, driving down the value of the US dollar. That in turn drives up the value of precious metals and I think that is essentially what we are looking at here.

Longer-term, I think that the silver markets go much higher, but we may need to cool off a bit in order to attract more value oriented traders. I have no interest in shorting this market, regardless of what it does next. At the very least we need to consolidate a bit before picking up the pace again. Longer-term, silver is going to go much higher.

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

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.

 

Silver Price Daily Forecast – Silver Pulls Back Below $24.00

Silver Video 30.07.20.

Silver Tests The Support At $23.25

Silver fell below the support level at $24.00 and is testing the next support level at $23.25 as gold pulled back from record highs while gold/silver ratio rebounded above 83.

Gold has declined closer to the $1950 level as some traders started to take their profits after the major rally. Yesterday’s Fed commentary put pressure on the global markets so some market participants may want to raise more cash.

Gold/silver ratio continued its rebound and is trying to settle above the 84 level. This is an important resistance level for gold/silver ratio, and a move above 84 will open the way to the test of the 20 EMA level at 88.40. This scenario will be bearish for silver.

Meanwhile, the U.S. dollar is flat against a broad basket of currencies. The U.S. Dollar Index made an attempt to settle above 93.5 but failed to gain more upside momentum and declined closer to recent lows.

Additional weakness of the U.S. dollar will be bullish for silver and other precious metals as it will make them cheaper for buyers who have other currencies.

However, I’d note that U.S. Dollar Index is in the oversold territory and the risk of a rebound is still significant.

Technical Analysis

silver july 30 2020

Silver has made an attempt to settle below the support level at $23.25 but this attempt was not successful so silver stays in the range between the previous support at $24.00 and support at $23.25.

RSI is returning to more normal levels so silver may develop additional upside momentum in case the right catalysts emerge. At this point, an additional U.S. dollar weakness may serve as a catalyst that may support silver.

In case silver settles below the support at $23.25, it will head towards the next support level at $22.30. A move below this level will signal that the current upside momentum has come to an end. In this scenario, silver will decline towards the 20 EMA at $21.30.

On the upside, silver will likely face some resistance at the previous support level at $24.00. If silver manages to get above this level, it will head towards the next resistance level at $24.95. A move above $24.95 will likely provide silver with an opportunity to test the recent highs at $26.20.

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

Daily Gold News: Thursday, July 30 – Gold’s Volatility Increase Following Record-Breaking Rally

The gold futures contract reached new record high of $1,974.90 on Wednesday, as it slightly extended its recent advance. But the market has closed just 0.45% higher and over $20 below yesterday’s daily high. Gold reached the highest in history following U.S. dollar sell-off, among other factors.

Gold is 0.9% lower this morning as it is trading within a short-term consolidation following record-breaking advance. What about the other precious metals? Silver gained 0.09% on Wednesday and today it is 3.9% lower. Platinum lost 2.81% and today it is 2.5% lower. Palladium lost 4.41% on Wednesday and today it’s 5.3% lower. So precious metals are retracing some of their recent rally this morning.

Yesterday’s U.S. Pending Home Sales number release has been slightly better than expected. At 2:00 p.m. we got the FOMC Statement announcement that has led to an increased volatility. Gold went higher before retracing the whole intraday advance.

Today we will get the important U.S. Advance GDP number, among others. The GDP is expected to decline by a stunning 34.5% q/q!

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

Thursday, July 30

  • 4:00 a.m. Eurozone – German Preliminary GDP q/q, ECB Economic Bulletin
  • 5:00 a.m. Eurozone – Unemployment Rate
  • 8:30 a.m. U.S. – Advance GDP q/q, Advance GDP Price Index q/q, Unemployment Claims
  • 9:00 p.m. China – Manufacturing PMI, Non-Manufacturing PMI

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

What future gold price behavior may be? Let’s take a look at our proprietary Gold True Seasonality for the third quarter of 2020 where we combined the regular seasonality with the effect of the expiration of options and accuracy estimation. The yearly seasonal pattern of the price of gold was calculated using a 18-year-long period from 2002 to 2019 and then adjusted for the expiration of options that we observed between 2009 and 2019.

We can see that gold is usually going higher in August and September. But will the market continue upwards despite some clear technical overbought conditions and a possible uptrend exhaustion?

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.

 

Technical Patterns, Future Expectations and More – Part II

Continuing this multi-part research article, today we are going to explore some more immediate (shorter-term) technical setups.  If you missed the first part of this research article, please take a minute to review it before continuing because there is quite a bit of information and related article links that are very important for you to understand this next article. You can view it here.

In the first part of this article, we discussed how our team evaluates a proper market perspective and how we build a consolidated narrative for our subscribers.  Some times, it is not easy for us to build a suitable narrative or decide on risk factors as our team may not completely agree with one another.  At times like this, we’ll often decide that no action is better than taking any action at all.  Generally, though, our team is able to adopt a consensus narrative related to portfolio allocation levels, general market trends and specific target trade setups for the next 5 to 10+ trading days.

The Technical Traders services’ primary objective is to protect assets while attempting to deliver success with trading signals that generate consistent profits.  We care, very deeply, about our members and their success.  Our team has a combined experience in the markets of over 55+ years, and have lived through various market and economic scenarios going back over 35+ years. We have also had the opportunity to learn from some of the best technicians and analysts on the planet.  We publish our public research for two primary reasons: a) to assist our friends and followers, and b) to publically document our future calls and predictions – putting our necks on the line every time we publish anything to the general public.

When we develop a narrative for our members, we internally discuss longer-term and shorter-term expectations as well as to identify concerns or risks that we see as evident in the markets or setups that are present today.  As we suggested in Part I of this article, we don’t try to over trade and are very selective in our trades. We also have processes in place to ensure we have found the right risk /reward ratio prior to initiating new trades.  If we miss a move – we won’t chase it – there will always be other trades setting up for us to capture new profits for our members. We see some interesting events unfolding that will undoubtedly lead to some fantastic trades.

PUT/CALL RATIO SHOWS SELLERS LINING UP

A screen shot of a computer Description automatically generated

The chart above highlighting the PUT/CALL ratio suggests sellers are lining up near recent highs, expecting the markets to roll over as the Q2 earnings and data are released.  It makes sense that the data could be somewhat bearish in nature given the potential destruction of earnings and revenues in Q2.  It also makes sense that near recent highs, as the S&P 500 and Dow Jones have recently rolled into a sideways consolidation, that skilled traders would pull profits near these levels and initiate new Put Options trades to hedge any downside risks in the future.

Gold and Silver recently fired a very large warning shot for anyone paying attention.  The US Dollar has continued to weaken and Crude Oil may begin a new downside price trend if the economic data suggests a broader contraction in the US economy.  What all this means is that skilled traders and others are losing their bullish bias in the markets and are starting to become protective – expecting some type of new trend to setup.

Our researchers believe a downside price move targeting the $252 level on the SPY is not out of the question. Recall the $252 level is a price level that corresponds with economic expectations as of late 2017.  These levels represent a fairly nominal price correction that would still be considered moderate bullish overall.  Any deeper price move would indicate the markets are completely disconnected with future expectations for the rest of the year and possibly further out into the future.

VIX BACK AT FEBRUARY FEAR LEVELS

The VIX is trading at levels that indicate the level of fear in the markets has recovered to historically moderately high levels (near 25.00) – see the chart below.  Volatility is still a major factor in the markets and any change in trend could be aggressive and violent – sending VIX above 40.00 again.  We believe this new low level in the VIX is indicative of complacency in the markets and with the current bullish price trend.  Complacency in the markets tends to lead to very aggressive price corrections.  We believe skilled technical traders should adopt a very cautious stance going forward and protect open long positions exposed to risk.

A screen shot of a computer Description automatically generated

If the markets begin to breakdown on the Q2 GDP and Consumer data that will be released on Thursday, July 30, 2020, then the VIX will begin to move dramatically higher. In this situation, stop levels just below the current market price levels will begin to become targets.  We can also expect to experience a similar event as that of February 2020, a type of flash-crash where a -12 to -18% downside price move could happen over a matter of days – not weeks.

Pay attention to what happens in the Transportation Index and with Crude Oil and Gold and Silver.  Our researchers follow these as early warning triggers for what may come.  Additionally, our cycle research suggests a bottom in the markets will likely form in 2022 to 2023 – thus we may have quite a bit of sideways or downside price action ahead of us before a true market bottom completes.  At this point, in order for our cycle research to become valid, we would need to see a downside price move that substantiates the cycle predictions.

Right now, the advice we continue to provide to our members is to be patient, protect your profits and assets, and prepare for more volatility and risks.  This is not the time to play games with your capital and we strongly believe this is not the time to “buy the dips”.  A bigger price pattern is setting up in the markets and many traders simply ignore these broader technical patterns.  You can read more about these types of patterns in one of our recent research posts that explains the selloff structure. You can also see why we think gold will break out and silver will go ballistic once the stock market bottoms.

We hope you’ve found this multi-part research article helpful and informative.  Remember, read our research and determine if you like and agree with our conclusions.  Even if you don’t agree, pay attention to what we are suggesting.  You never know, it might lead you to make a decision that could help you protect your assets, find a new opportunity or, at the very least, help to keep you better informed – and that is our ultimate goal.  We put this effort into publishing these public research articles every day to help you stay ahead of the biggest moves in the markets.

See the articles listed above and read them to learn more about how we see the future unfolding. We believe you won’t find any better research or analysis anywhere on the web than what we offer and we urge you to take advantage of our member/subscriber services when you are ready.  The next 24 months are going to be really crazy – get ready for some really great opportunities.

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 followers/readers in an effort to try to keep you well informed.  Visit our web site (www.thetechnicaltraders.com) to learn how to take advantage of our members-only research and trading signals.

Silver Price Forecast – Silver Markets Drift Lower

Silver markets have drifted a little bit during the trading session on Wednesday, reaching down towards the $24 level. This is an area that of course will attract a little bit of attention due to the fact that it is a large, round, psychologically significant figure but at the end of the day I think we are still in a very bullish marketplace. I think the biggest problem we have here is that silver simply got way too far ahead of itself, and therefore it makes a bit of sense that we may see the market give back some of the gains. Markets do not go straight up in the air forever, and I think that is what people who are stepping into buy silver at this level are about to learn.

SILVER Video 30.07.20

The FOMC will course attract a lot of attention, as the Federal Reserve will be releasing its FOMC statement, which is of course going to move the value of the US dollar. The US dollar obviously has an influence on where precious metals go, especially silver which is a much thinner market than gold. At this point, I would love to see silver pull back towards the $22 level, perhaps even the $20 level so that I can pick up “cheap silver” at those levels. This will flush a lot of the “weak hands” out of the marketplace, and then we will be able to build a longer-term base for higher pricing. I do believe that we go much higher, but we cannot go up there in a straight line.

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

Silver Price Daily Forecast – Silver Tries To Stabilize After Wild Swings

Silver Video 29.07.20.

Silver Flat Ahead Of Fed Interest Rate Decision

Silver managed to stay above $24.00 after the wild trading action seen on Tuesday.

Today, the key catalyst for silver and other precious metals is the Fed Interest Rate Decision and comments from the Fed Chair Jerome Powell.

Ahead of the rate decision, the U.S. dollar is losing ground against a broad basket of currencies, and the U.S. Dollar Index is testing the support level at 93.5.

A move below this support level will be bullish for silver and other precious metals since weaker dollar makes them cheaper for buyers who have other currencies.

I’d note that the U.S. dollar was also under pressure on June 10 ahead of the previous Fed Interest Rate Decision but then reversed course. If this pattern is replicated today, silver may experience a sell-off.

Meanwhile, the rally in gold continues. Yesterday, spot gold set a new record high at $1981 per ounce but then pulled back a bit. Today, gold is trying to continue the upside move and is currently trading near the $1960 level.

Gold/silver ratio is trying to settle above the 80 level after yesterday’s dive below 76. Gold/silver ratio made a serious downside move in July so it may need some time to stabilize at new levels.

Technical Analysis

silver july 29 2020

Silver is trying to settle above the $24.00 level which emerged as the nearest support level.

RSI is still in the overbought territory and the risk of correction is high, although near-term trading dynamics will likely depend on the Fed’s commentary and subsequent moves of the U.S. dollar.

The previous upside move was very fast so there are no important resistance levels before the recent high at $26.20. However, such levels will likely present themselves if silver continues to move higher.

On the support side, a move below the nearest support level at $24.00 will open the way to the test of the next support level at $23.25.

At this point, a major support level for silver is located at $22.30, at the low of the previous trading day. A move below this level will mark the end of the current upside momentum.

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

U.S. Stocks Set To Open Higher As Traders Hope For More Support From The Fed

Coronavirus Aid Package Talks Continue

Yesterday, the lack of progress in negotiations between Republicans and Democrats regarding the new round of economic stimulus pushed stocks lower at the end of the trading session.

Today, the talks will continue. Republicans have offered a coronavirus aid package worth $1 trillion while Democrafts favor a much bigger aid package worth $3 trillion.

In addition, Republicans want to cut unemployment benefits from $600 per week to $200 per week as higher benefits discourage people from actively searching for work. Democrats want to continue with $600 weekly benefits for a couple of months.

The stimulus is very important for economic recovery so the market is nervous on any negative news about the ongoing negotiations.

However, S&P 500 futures are gaining ground in premarket trading, suggesting that traders believe that Democrats and Republicans will reach consensus by the end of this week.

Fed Commentary In Focus

Today, the U.S. Federal Reserve will announce its Interest Rate Decision. The rate is expected to stay unchanged so the market will focus on Fed’s commentary.

The Fed is in a challenging situation since a surge in the number of coronavirus cases in the U.S. has put the speed of economic recovery under question.

The Fed has already announced that it will keep its existing emergency lending programs until the end of the year, but traders will be looking for additional signs that Fed will use extra instruments to support the economy.

Fed’s commentary is especially important for the U.S. dollar, which has experienced significant pressure in July. In case the U.S. dollar continues its downside move, we’ll see more upside in gold, silver and mining stocks.

Crude Inventories Suddenly Decline

The recent API Crude Oil Stock Change report showed that U.S. crude inventories declined by 6.83 million barrels.

The report provided support to WTI oil which has recently lacked momentum amid worries that problems on the coronavirus front will put pressure on oil demand.

For oil to have more chance to gain momentum, the increase in inventories should be confirmed by EIA Weekly Petroleum Status report which is due to be published today.

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

Daily Gold News: Wednesday, July 29 – Uncertainty Following Gold’s Record-Breaking Rally

On Tuesday the gold futures contract reached another new record high of $1,974.70, as it accelerated the advance following recent breakout above the short-term trading range and $1,800 level. However, the yellow metal closed $30 below the daily high yesterday, as it gained 0.7%. Gold reached the highest in history following U.S. dollar sell-off, among other factors.

Gold is unchanged this morning as it is extending a short-term consolidation following record-breaking advance. What about the other precious metals? Silver lost 0.82% on Tuesday and today it is 0.1 % lower. Platinum gained 2.03% and today it is 1.1% lower. Palladium lost 0.18% on Tuesday and today it’s 2.7% lower. So precious metals are mixed this morning.

Yesterday’s U.S. CB Consumer Confidence release has been slightly worse than expected at 92.6. Today we will get the Pending Home Sales number at 10:00 a.m. and then the important FOMC Statement release at 2:00 p.m.

On Thursday we will get the U.S. Advance GDP number, among others. The GDP is expected to decline by a stunning 35.0% q/q!

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

Wednesday, July 29

  • 8:30 a.m. U.S. – Goods Trade Balance, Preliminary Wholesale Inventories m/m
  • 10:00 a.m. U.S. – Pending Home Sales m/m
  • 2:00 p.m. U.S. – FOMC Statement, Federal Funds Rate
  • 2:30 p.m. U.S. – FOMC Press Conference

Thursday, July 30

  • 4:00 a.m. Eurozone – German Preliminary GDP q/q, ECB Economic Bulletin
  • 5:00 a.m. Eurozone – Unemployment Rate
  • 8:30 a.m. U.S. – Advance GDP q/q, Advance GDP Price Index q/q, Unemployment Claims
  • 9:00 p.m. China – Manufacturing PMI, Non-Manufacturing 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.

* * * * *

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.

 

Silver Price Forecast – Silver Markets Explode with Volatility

Markets cannot go straight up in the air forever and it seems that somebody in the silver markets has come to that conclusion again. Because of this, it is worth noting that there is massive candlestick probably kicks off a period in which we are more than likely going to see choppiness and perhaps even better yet, some type of pullback that we can be a buyer of. I do not necessarily think that the fundamental outlook for silver or gold for that matter has changed, just that we had gotten way ahead of ourselves.

SILVER Video 29.07.20

It is worth noting that this happened in the middle of the Asian session, when liquidity is the thinnest. My suspicion is that a large cell program came in to take profit, and then it triggered off a bunch of other automated programs. However, this will clearly have shaken the nerves of a lot of traders, so at the very least this market probably needs to grind back and forth for a while. Ultimately, we are still in an uptrend but I right away is probably reckless to say the least.

I would be very interested in the market somewhere near the $22 level, and even more so near the $20 level, although I do not know that we get down there anytime soon. Regardless, the only thing more reckless than buying silver here is probably shorting it. It is a one-way trade still, but that does not necessarily mean that you need to jump in at any random moment either.

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

Silver Price Daily Forecast – Crazy Action In Silver

Silver Video 28.07.20.

Silver Swings Between Support At $22.30 And Resistance At $26.20

Silver had a wild trading session, rising to $26.20 and then falling to $22.30 before stabilizing near the $24.00 level.

Gold also had an active trading session but did not have such wild swings, although it managed to set a new record at $1981 on a spot basis.

The major activity in both silver and gold comes ahead of the U.S. Federal Reserve meeting. While the interest rate is almost guaranteed to stay unchanged, the market will evaluate Fed’s commentary to find clues about future policy.

Gold/silver ratio also had wild swings, falling below 76 and then rising above 85 before stabilizing near the 81 level.

Such crazy action often highlights extreme points so silver will likely need additional upside catalysts to continue the current upside trend.

Meanwhile, the U.S. dollar is showing signs of a rebound. The U.S. Dollar Index, which measures the strength of the U.S. dollar against a broad basket of currencies, has found support near 93.5 and made an attempt to settle above the 94 level.

Stronger U.S. dollar is bearish for silver and other precious metals as it makes them more expensive for buyers who have other currencies. In case the U.S. dollar fails to rebound and drops to new lows, precious metals will get an additional boost.

Technical Analysis

silver july 28 2020

Silver had a very busy day, testing resistance at $26.20 and then diving to test support at $22.30, right near the previous low at $22.25.

It is likely that just one trading day highlighted both the low end and the high end of the upcoming trading range with support at $22.30 and resistance at $26.20.

Inside this range, the nearest support for silver is located at $23.25. In case silver settles below this level, it will head towards the test of the major support level at $22.30.

On the upside, the nearest resistance has presented itself near the $24.00 level. A move above this level will open the way to the test of the resistance at $26.20, although silver may face additional resistance at lower levels.

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

U.S. Stocks Set To Open Lower As Traders Wait For Results Of Coronavirus Aid Negotiations

Coronavirus Aid Package In Focus

Republicans have agreed on the details of their new coronavirus aid package and have started negotiating with democrats.

The key development is the decision to cut the $600 weekly unemployment benefits to just $200 through September. After this, Republicans expect that the states will be ready to process a more sophisticated scheme which will distribute 70% of workers’ previous pay.

Not surprisingly, stimulus checks, school funding and Paycheck Protection Program loans are also included in the package which is worth $1 trillion.

It looks like traders prefer to wait for the ultimate results of negotiations, and S&P 500 futures are losing ground in premarket trading.

All Eyes On U.S. Dollar Ahead Of The Fed Meeting

On Wednesday, the U.S. Federal Reserve will announce its Interest Rate Decision. The rate is expected to stay unchanged, and the market will pay attention to Fed’s comments.

Most observers expect that the Fed will be very dovish, promising to keep rates low for the foreseable future and assuring the market that it has enough firepower in case the economic rebound stumbles.

The Fed’s commentary may have a serious impact on the U.S. dollar which lost plenty of ground in July. The U.S. Dollar Index has currently settled below the 94 level while it started the month near the 97 level.

The downside move of the U.S. dollar has provided additional support to the U.S. stock market since stocks are denominated in dollars. A rebound of the American currency may put some pressure on stocks which currently lack significant upside catalysts and struggle to get to new highs.

Gold Pulls Back After Setting Another Record

Spot gold traded as high as $1981 per ounce before diving below $1930.

The above-mentioned Fed meeting will be very important for gold, silver and other precious metals since this segment is supported by never-ending monetary stimulus and low interest rates.

If the Fed sounds very dovish, precious metals may have more room to run.

At the same time, it’s worth noting that gold had a great run without any pullback so traders may start taking their profits.

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