Silver Price Prediction – Prices Consolidate as U.S. New Orders Slide

Silver prices moved sideways, forming a doji day which is a sign of indecision. This occurs when the open and the close are at the same level. The weaker than expected U.S. ISM manufacturing report likely weighed on prices, but declining yields offset this momentum. Gold prices were also unchanged but U.S. Yields moved lower following the softer than expected ISM manufacturing report. Copper prices moved lower which also weighed on silver prices.

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Technical analysis

Silver prices moved sideways on Monday, consolidating in the middle of last week’s range.  Support is seen near the 10-day moving average at 25.21. Resistance is seen near the July highs at 25.80. Short-term momentum has turned negative as the fast stochastic generated a crossover sell signal.  Medium-term positive momentum has turned positive as the MACD (moving average convergence divergence) index generated a crossover buy signal. This scenario occurs as the MACD line (the 12-day moving average minus the 26-day moving average) crosses above the MACD signal line (the 9-day moving average of the MACD line).

Forward Look Orders Slide

Not only did the ISM survey slip below 60 missing expectations, but the ISM forward-looking new orders sub-index fell to a reading of 64.9 last month from 66.0 in June. That was the second consecutive decline in a row.  Part of the problem is that shipping rates are elevated, and there is a lack of containers to move new products to future destinations. Production at factories declined, which has led to a rise in backlogs. Without employees to accelerate the process, orders will continue to slide.

Natural Gas Price Prediction – Prices Move Higher on Warm Weather Forecast

Natural gas prices moved higher on Monday after bouncing from its lows on Friday. The weather is expected to be warmer than average throughout the North East for the next 6-10days and than moderate but remains warmer than normal throughout most of the country. There is one disturbance with a 10% chance to become tropical cyclones in the Atlantic or Gulf of Mexico over the next 48-hours.

Technical Analysis

Natural gas prices were higher on Monday rising after dropping sharply on Friday Support is seen near the 10-day moving average near 3.95. Resistance is seen near the July highs at 4.19. Short-term momentum has turned positive as the fast stochastic generated a crossover buy signal. Medium-term positive momentum is negative as the MACD (moving average convergence divergence) generated a crossover sell signal. This occurs when the MACD line (the 12-day moving average minus the 26-day moving average) crosses below the MACD signal line (the 9-day moving average of the MACD line.

Natural Gas Storage Rises but Trajectory is Sideways

The net injections into storage totaled 36 Bcf for the week ending July 23, compared with the five-year average net injections of 28 Bcf and last year’s net injections of 27 Bcf during the same week. Working natural gas stocks totaled 2,714 Bcf, which is 168 Bcf lower than the five-year average and 523 Bcf lower than last year at this time. The trajectory of the movements of inventory injections is sideways as opposed to rising into the beginning of the withdrawal season.

Gold Price Prediction – Prices Consolidate Following Weak ISM Manufacturing Report

Gold prices moved sideways, forming a doji day which is a sign of indecision. This movement in the yellow metal was in tandem with an unchanged reading on the greenback. U.S. Yields moved lower following the softer than expected ISM manufacturing report. The decline in the ISM figures was counter to the better than expected EU PMI manufacturing report released earlier in the day. As the delta variant threat continues to worsen, any weakness will continue to weigh on U.S. yields and help buoy gold prices.

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Technical analysis

Gold prices moved sideways on Monday, consolidating at the upper end of last week’s range.  Support is seen near the 10-day moving average at 1,808. Resistance is seen near the July highs at 1,834. Momentum is positive as the fast stochastic generated a crossover buy signal.  Medium-term positive momentum is decelerating as the MACD (moving average convergence divergence) histogram is printing in positive territory with a downward sloping trajectory which points to consolidation.

U.S. ISM Manufacturing Slips

According to the Institute of Supply Management (ISM), manufacturing activity declined in July and was the lowest print since January. The 59.5 ISM manufacturing survey in July was down from the 60.6 reading in June. Expectations were for the manufacturing index to come in at 60.9. The survey moved in the opposite direction of the Eurozone flash PMI survey, at 62.8 from 62.6 in June.

NCR Makes Crypto Push With Key Bitcoin ATM Deal

Bitcoin ATMs are all the rage. Just ask NCR Corp, which just revealed its plans to acquire bitcoin ATM software provider LibertyX. While the companies held the financial terms of the deal close to the vest, they did say that the combination was expected to be completed by year-end. NCR said it made the acquisition in response to customer demand for the following:

  • Transacting in cryptocurrencies
  • Cross-border payments
  • Supporting crypto payments

LibertyX describes itself as a “network of bitcoin ATMs, cashiers and kiosks.” Its technology is used at 20,000 retailers and close to 10,000 ATMs. With the muscle of the NCR brand, LibertyX’s crypto solution will now be available at financial institutions, brick-and-mortar retail locations and restaurants.

In turn, consumers will have the ability to make crypto payments at more merchants. NCR’s payment infrastructure can be found at major retailers, including the likes of big-box retailer Walmart, though NCR did not say which companies would take advantage of the crypto features.

Market Reaction

Typically when a merger is announced, the stock of the company doing the buying comes under pressure. That is what is happening to shares of Square today after its announced deal to buy Afterpay. In the case of NCR and LibertyX, however, the buyer’s shares are actually up by 1.5% in the trading session, which could be a sign of investors approving its expansion into the cryptocurrency arena.

In the cryptocurrency market, bitcoin’s price is under pressure, falling more than 3% in the last 24-hour period. The bitcoin price has dipped below the USD 40K level once again despite having spent the weekend above that psychologically important threshold.

Mainstream Adoption

The response on social media has been decidedly positive, including from NCR’s chief technology officer Tim Vanderham, who said he is “proud” to be “leading the team” that will bring “crypto and digital asset capabilities” to the masses.

NCR is no stranger to crypto. In June, NCR and NYDIG partnered in a deal that delivered bitcoin solutions to banks and credit unions, giving users the ability to trade crypto via mobile apps.

Despite the short-term pressure on the bitcoin price, the deal between NCR and LibertyX bodes well for the future of cryptocurrency adoption. Considering that NCR is a Fortune 500 company, the combination has the potential to thrust bitcoin more into the mainstream.

Google To Ditch Qualcomm And Develop Its Own Smartphone Processors This Year

Search engine giant Google has announced that it would no longer be using Qualcomm’s processors on its smartphones as it would start building its own processors this year.

Google To Start Building Its Processors This Year

Tech giant Google revealed earlier today that it would start building its own smartphone processors this year. According to its announcement, the processor would be called Google Tensor, and it will serve its new Pixel 6 and 6 Pro phones set to be released later this year.

This latest development means that Google will no longer be using chips manufactured by Qualcomm. However, Qualcomm pointed out that it would continue to work with the search engine giant on existing and future products based on its Snapdragon platform.

The Google Tensor processor is expected to power the company’s new flagship phones, which are expected to be launched in October. The Pixel 6 and 6 Pro phones will see Google move away from offering affordable smartphones to high-end products. Google is looking to compete with Apple and Samsung by offering more high-end products to its customers.

GOOGL stock chart. Source: FXEMPIRE

The move by Google is similar to that of Apple. The iPhone manufacturer ditched Intel and began manufacturing its own processors. Similar to Apple, Google will use Arm-based architecture for its processors. Arm processors are usually lower power and are mostly used across the industry for mobile devices, such as phones, tablets and laptops.

Qualcomm And Google Shares All Up As The Market Opens

The shares of Qualcomm and Google are both up as the United States market opens today. QCOM is up by 0.05% today despite the news that Google will no longer be using its smartphone processors. Year-to-date, QCOM has remained rather flat as it began the year trading at $150, and it is now trading at $149.90 per share.

QCOM stock chart. Source: FXEMPIRE

GOOGL, on the other hand, is up by 0.08% so far today. Google is one of the best-performing stocks this year, up by 53% year-to-date. Google began 2021 trading at $1,752 per share, but an extended rally has seen it gone up by nearly $1,000 as it is now trading at $2,696.

USD/CAD Daily Forecast – Test Of Resistance At 1.2500

Canadian Dollar Is Losing Ground Against U.S. Dollar

USD/CAD is currently trying to settle back above 1.2500 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index failed to settle below the 50 EMA at 91.90 and returned to the 92 level. The nearest significant resistance level for the U.S. Dollar Index is located at 92.15. In case the U.S. Dollar Index gets to the test of this level, USD/CAD will get more support.

Today, U.S. released the final reading of Manufacturing PMI report for July which indicated that Manufacturing PMI increased from 62.1 in June to 63.4 in July compared to analyst consensus of 63.1. Interestingly, ISM Manufacturing PMI declined from 60.6 to 59.5 compared to analyst consensus of 60.9.

Foreign exchange market traders also focused on dynamics of commodity markets. WTI oil found itself under strong pressure amid worries about the slowdown of China’s manufacturing activity.

Currently, WTI oil is trying to settle below the $71 level. In case this attempt is successful, WTI oil will move towards the psychologically important $70 level which will be bearish for commodity-related currencies including Canadian dollar.

Technical Analysis

usd cad august 2 2021

USD to CAD managed to settle back above 1.2480 and is testing the resistance level at 1.2500. In case USD to CAD settles above this level, it will move towards the resistance which is located at the 20 EMA at 1.2515.

A successful test of the resistance at 1.2515 will push USD to CAD towards the next resistance at 1.2550. In case USD to CAD gets above this level, it will head towards the significant resistance level at 1.2590. Back in July, USD to CAD made several attempts to settle above 1.2590 but faced strong resistance.

On the support side, a move below 1.2500 will push USD to CAD towards 1.2480. If USD to CAD declines below this level, it will head towards the support at 1.2450. A move below 1.2450 will lead to the test of the 50 EMA which is located at 1.2440.

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

S&P 500 Price Forecast – Stock Markets Continue to Reach Towards Highs

The S&P 500 has rallied a bit during the course of the trading session on Monday as we continue to see a move to the upside going forward. We are sitting just above the 4400 level in the futures market in that suggests that we could go looking towards the 4500 level. That of course is an area that will attract a lot of attention, so I would anticipate a little bit of a struggle in that area. Remember, we are almost through earnings season, and it has been fairly strong, but we also have the jobs number at the end of the week that could put a bit of a lid on the move over the next couple of days. Because of this, I believe that this is a market that is trying to build up enough momentum to go higher.

S&P 500 Video 03.08.21

Underneath, the 50 day EMA and the uptrend line both would offer support, just as the 4200 level will. Breaking down below there could very well open up the possibility of a move down to the 4000 handle, which is a large, round, psychologically significant figure. That is also an area where we would have a lot of options barriers that come into play as well. Breaking down below there could open up the possibility of buying puts, and at this juncture that that is as negative as I would get it, due to the fact that the Federal Reserve might get involved either verbally or through some type of quantitative easing program. Because of this, the market is one that you can either be long of or on the sideways unless of course you are playing options.

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

Crude Oil Price Forecast – Crude Oil Markets Pull Back

WTI Crude Oil

The West Texas Intermediate Crude Oil market has fallen rather hard during the trading session on Monday to break down a bit and suggest that we may be getting “a little toppy.” With that being said, I do think the market has plenty of support underneath, especially near the $70 level and the 50 day EMA as well. All things being equal, this is a market that I think probably offers a bit of value in the short term before traders come back in and try to pick things up. With the PMI figures in China being just above expansion, and shrinking, it is likely that the market will continue to worry about whether or not the demand will continue.

SILVER Video 03.08.21

Brent

Brent markets have pulled back significantly during the course of the trading session as well, as we are likely to go looking towards the 50 day EMA underneath. With that being said, the market will continue to be very noisy, and I do think that there are plenty of buyers underneath at my get involved. The $70 level underneath would be significant support more likely than not, and as a result I think we continue to consolidate and go sideways more than anything else. On the other hand, if we can break out to a fresh, new high it is likely that the market will go looking towards the $80 level. I am looking for an opportunity to pick up value, but it may need to wait a couple of days as the market continues to be very volatile.

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

Crude Oil Price Forecast – Crude Oil Markets Pull Back

WTI Crude Oil

The West Texas Intermediate Crude Oil market has fallen rather hard during the trading session on Monday to break down a bit and suggest that we may be getting “a little toppy.” With that being said, I do think the market has plenty of support underneath, especially near the $70 level and the 50 day EMA as well. All things being equal, this is a market that I think probably offers a bit of value in the short term before traders come back in and try to pick things up. With the PMI figures in China being just above expansion, and shrinking, it is likely that the market will continue to worry about whether or not the demand will continue.

Crude Oil Video 03.08.21

Brent

Brent markets have pulled back significantly during the course of the trading session as well, as we are likely to go looking towards the 50 day EMA underneath. With that being said, the market will continue to be very noisy, and I do think that there are plenty of buyers underneath at my get involved. The $70 level underneath would be significant support more likely than not, and as a result I think we continue to consolidate and go sideways more than anything else. On the other hand, if we can break out to a fresh, new high it is likely that the market will go looking towards the $80 level. I am looking for an opportunity to pick up value, but it may need to wait a couple of days as the market continues to be very volatile.

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

Why Pfizer Stock Is Testing New Highs Today

Pfizer Raised Prices For COVID-19 Vaccines In EU

Shares of Pfizer gained strong upside momentum and moved to new highs after reports indicated that Pfizer and Moderna raised prices of their coronavirus vaccines in the latest contracts with EU.

According to Financial Times, the price for a Pfizer shot was increased from 15.50 euros to 19.50 euros, an increase of roughly 25%. Moderna’s price grew from 19 euros to $25.50 per shot.

Not surprisingly, the market quickly reacted to the new deal which will increase Pfizer’s revenue. This deal shows that Pfizer has pricing power as demand for coronavirus vaccines stays strong. At the same time, Pfizer has already supplied the initial doses of its COVID-19 vaccines at lower prices, so the firm should not face allegations that it is trying to profit from the pandemic.

What’s Next For Pfizer Stock?

Pfizer has recently reported its second-quarter earnings. The company reported revenue of $19 billion and GAAP earnings of $0.98 per share, easily beating analyst estimates on both earnings and revenue.

Pfizer has increased its full-year 2021 revenue guidance from $70.5 billion – $72.5 billion to $78 billion – $80 billion due to the strength of its COVID-19 vaccine business.

The company also stated that it was confident that a booster dose of its vaccine would protect people against the Delta variant of coronavirus. Most countries have not decided whether they will use booster shots of coronavirus vaccines, but the likelihood of this scenario is increasing as the spread of the Delta variant has led to an increase in the number of new coronavirus cases in countries with successful mass vaccination programs.

Solid pricing power and strong demand for coronavirus vaccines will continue to serve as bullish catalysts for Pfizer shares in the upcoming weeks. The stock is trading at about 13 forward P/E which is cheap for the current market environment, and the company’s shares have decent chances to continue their upside move.

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

Natural Gas Price Forecast – Natural Gas Continues to Shuffle Around Big Figure

Natural gas markets have rallied just a bit during the course of the trading session after gapping higher, showing signs of their proclivity to hang around the $4.00 level. The $4.00 level of course is an area that would attract a lot of attention as it is a large, round, psychologically significant figure, and of course an area that will cause a lot of headline noise. As you can see of the last couple of weeks, we certainly have a lot of issues to work out in this general vicinity.

NATGAS Video 03.08.21

Natural gas markets continue to get a little bit of a boost due to the idea of more demand coming out the United States, as the heatwave continues to cause issues. Furthermore, from a technical analysis standpoint you can make an argument that this market should go looking towards the $4.40 level anyway, as we had formed a bullish flag previously, which of course measure to that level. After that, the market also had a consolidation area between the $2.40 level and the $3.40 level, which of course measures to a move towards the $4.40 level.

The 50 day EMA is sloping higher, and as a result it is likely that that could also offer a certain amount of support on any type of pullback. The commodity boom in general continues to lift all markets, and the natural gas market of course will not be any different. In general, this is a market that will continue to be very choppy but more likely than not will have more upward momentum than down and as a result I have no interest in shorting this market.

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

Gold Price Forecast – Gold Markets Settle at 200 Day EMA

Gold markets pulled back a bit during the trading session on Monday as we have continued to see a lot of noisy behavior. The 200 day EMA continues to be an area that a lot of people will pay attention to, especially as it is flat and therefore suggests that we are essentially in a sideways market. That being said, pay close attention to the US dollar, because it has a significant negative correlation in general, and as a result I think that the US dollar will be the biggest influence on this market.

Gold Price Predictions Video 03.08.21

To the downside, the $1790 level is supportive, and therefore I think if we break down below there, we could go down towards the $1750 level. That is where we have bounced significantly from before, and if we break down below there then it is likely that the $1680 level will be tested as it is where we formed a massive “double bottom.” On the other hand, there is that gap above that sits at $1860 level that would need to be filled. Breaking above there then opens up the possibility of a move much higher, but I think at this point it is going to take a little bit of a push to make that happen.

One thing is for sure, the market is choppy to say the least, so the easiest thing could possibly be to trade back and forth in small increments in order to take advantage of the obvious range that I have marked on the chart that has been important for several weeks now and from what I can see will continue to be.

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

USD/MXN Extends Decline Due to a Dollar Post-Fed Hangover and Tests 19.80 Support

The US dollar is declining against the Mexican Peso for the eighth day in a row as investors digest the effects of the Federal Reserve’s relaxed stance towards cutting stimulus and fighting inflation.

The USD/MXN traded lower on Monday. The pair tested the 19.80 level as a continuation of the July 29 break of the dynamic uptrend support line from June 9. The dollar is currently trading at 19.8075 against the Mexican peso, down 0.38 percent.

Investors are still digesting the Federal Reserve‘s monetary policy decision made last week. According to the American central bank, the United States economy is doing well, but the progress is not significant enough to justify a tapering in the near future.

The dollar index extended its decline after the Federal Reserve’s announcement, and it is now trading around 91.98, down 0.11 percent on Monday. Previously, DXY traded at 91.78 on July 30, its lowest level in over a month.

Wells Fargo analysts predict that no taper announcement will be made before the end of December.

“We look for the FOMC to make a formal announcement regarding the tapering of its asset purchases at the December 14-15 meeting, and we expect that the Fed will begin the process of winding down its purchases early next year,” the bank said in a recent note. “But before that formal announcement is made, we expect that Fed officials will hint that tapering will be forthcoming.”

USD/MXN below the 200-day moving average

USDMXN daily chart

In nearly two weeks, the USD/MXN lost around 2 percent of value from July 21 high at 20.25 to August 2 provisional low at 19.80. The pair achieved some technical milestones in the route, building up a bearish case that could lead the unit to 2021 lows at 19.50.

After the Fed, the bearish sentiment in the USD/MXN has just grown up. Now, the pair looks ready to tackle down the 19.80 area and extend declines to 19.70-75. Below there, 2021 lows wait at 19.55.

All eyes are now focused on the current week’s employment report. If the number is below expectations, the dollar will fall, giving the Mexican peso more room to gain.

Precious Metal Prices Hold Steady As Attention Shifts To U.S Jobs Data – What’s Next?

Last week, Fed Chair Jerome Powell acknowledged that inflation has risen much faster this year than he and other senior Federal Reserve members predicted. He also flagged the possibility that inflation “could turn out to be much higher and more persistent in the second half of 2021, than the Fed is expecting”.

The major market-moving event this week that is likely to push Precious metal prices one way or the other will be Friday’s closely watched U.S Nonfarm Payrolls Report from July.

If we see the Nonfarm Payrolls data surprise to the upside – that is going to intensify the debate that the labour market recovery is making its way to ‘substantial progress’ and lead to heightened volatility across the precious metals complex.

On the flipside, any disappointment on the employment front will ultimately be viewed as supportive for the precious metals.

Elsewhere, other key events that traders will be watching closely this week include; ISM Manufacturing PMI data, ADP Employment Change and U.S Jobless Claims.

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

Gold Jumps for Joy Only to Hit the Ceiling… Hard

The Gold Miners

While gold, silver and mining stocks jumped for joy following Fed Chairman Jerome Powell’s dovish remarks on Jul. 28, their sugar high ended on Jul. 30. And while I warned that FOMC press conferences often elicit short-term bursts of optimism, it was likely another case of ‘been there, done that.’

I wrote prior to the announcement:

While the PMs may record a short-term bounce – which often occurs following Powell’s pressers – lower lows are still likely to materialize in the coming months.

In the meantime, though, did you notice the tiny buy signal from the HUI Index’s stochastic indicator? And taking that into consideration, is it time to shift to the long side of the trade? Well, for one, it seems very likely that gold miners are declining similarly to how they declined in 2008 and 2012-2013. In both cases, there were local corrections within the decline. As a result, the recent strength does not justify adjusting our short positions in the junior mining stocks, and I continue to view them as prudent from the risk to reward point of view.

Second, after the HUI Index recorded an identical short-term buy signal in late 2012 – when the index’s stochastic indicator was already below the 20 level (around 10) and the index was in the process of forming the right shoulder of a huge, medium-term head-and-shoulders pattern – the HUI Index moved slightly higher, consolidated, and then fell off a cliff.

Please see below:

Can you see the HUI’s rally at the end of 2012 that followed a small buy signal from the stochastic indicator? I marked it with a purple, dashed line.

No? That’s because it’s been practically nonexistent. The HUI Index moved higher by so little that it’s impossible to see it from the long-term point of view.

With the shape of gold’s recent price action, its RSI, and its MACD indicators all mirroring the bearish signals that we witnessed back in December 2012, the current setup signals that we’re likely headed for a similar swoon. Thus, with both gold and the HUI Index sounding the alarm, if the bullish momentum continues, it’s likely to be very limited in terms of size and duration. Conversely, the following slide is likely to be truly profound.

For context, I warned previously that the miners’ drastic underperformance of gold was an extremely bearish sign. I wrote the following about the week beginning on May 24:

(…) gold rallied by almost $30 ($28.60) and at the same time, the HUI – a flagship proxy for the gold stocks… Declined by 1.37. In other words, gold stocks completely ignored gold’s gains. That shows exceptional weakness on the weekly basis and is a very bearish sign for the following weeks.

If it wasn’t extreme enough, we saw this one more time. Precisely, something similar happened during the week beginning on July 6. The gold price rallied by $27.40, and the HUI Index declined by 1.39.

Likewise, with the HUI Index’s ominous signals still present, if history rhymes (as it tends to), medium-term support will likely materialize in the 100-to-150 range. For context, high-end 2020 support implies a move back to 150, while low-end 2015 support implies a move back to 100. And yes, it could really happen, even though such predictions seem unthinkable.

In addition, the drastic underperformance of the HUI Index also preceded the bloodbath in 2008. To explain, right before the huge slide in late September and early October, gold was still moving to new intraday highs; the HUI Index was ignoring that, and then it declined despite gold’s rally. However, it was also the case that the general stock market suffered materially. If stocks didn’t decline back then so profoundly, gold stocks’ underperformance relative to gold would have likely been present but more moderate.

Nonetheless, bearish head & shoulders patterns have often been precursors to monumental collapses. For example, when the HUI Index retraced a bit more than 61.8% of its downswing in 2008 and in between 50% and 61.8% of its downswing in 2012 before eventually rolling over, in both (2008 and 2012) cases, the final top – the right shoulder – formed close to the price where the left shoulder topped. And in early 2020, the left shoulder topped at 303.02. Thus, three of the biggest declines in the gold mining stocks (I’m using the HUI Index as a proxy here) all started with broad, multi-month head-and-shoulders patterns. And in all three cases, the size of the declines exceeded the size of the head of the pattern.

Furthermore, when the HUI Index peaked on Sep. 21, 2012, that was just the initial high in gold. At that time, the S&P 500 was moving back and forth with lower highs. And what was the eventual climax? Well, gold made a new high before peaking on Oct. 5. In conjunction, the S&P 500 almost (!) moved to new highs, and despite bullish tailwinds from both parties, the HUI Index didn’t reach new heights. The bottom line? The similarity to how the final counter-trend rally ended in 2012 (and to a smaller extent in 2008) remains uncanny.

As a result, we’re confronted with two bearish scenarios

  1. If things develop as they did in 2000 and 2012-2013, gold stocks are likely to bottom close to their early-2020 low.
  2. If things develop like in 2008 (which might be the case, given the extremely high participation of the investment public in the stock market and other markets), gold stocks could re-test (or break slightly below) their 2016 low.

In both cases, the forecast for silver, gold, and mining stocks is extremely bearish for the next several months.

As further evidence, let’s compare the behavior of the GDX ETF and the GDXJ ETF. Regarding the former, the senior miners’ (GDX) RSI rose above 50 last week. However, the milestone preceded several corrective tops in 2020 and 2021. Thus, last week’s Fed-induced strength has only broadened the right shoulder of its bearish H&S pattern, and if completed, the size of the head implies a drawdown to roughly $28.

Please see below:

Meanwhile, the GDXJ ETF invalidated the breakdown below the neckline of its bearish H&S pattern last week. However, with the milestone likely a speed bump along the junior miners’ bearish journey, a mosaic of indications signal that their medium-term outlook remains quite somber. For context, with the junior miners’ RSI at 48.35, several flirtations with 50 coincided with the short-term peaks in 2021 and were followed by material declines. I marked these cases with red ellipses. And yes, it was also the case during the final corrective pre-slide upswing in March 2020.

The bottom line?

If gold repeats its June slide, it will decline by about $150. Taking the entire decline into account (since August 2020), for every $1 that gold fell, on average, the GDX was down by about 4 cents (3.945 cents) and GDXJ was down by about 6.5 cents (6.504 cents).

This means that if gold was to fall by about $150 and miners declined just as they did in the past year (no special out- or underperformance), they would be likely to fall by $5.92 (GDX) and $9.76 (GDXJ). This would imply price moves to $27.76 (GDX) and $35.78 (GDXJ).

In conclusion, gold, silver, and mining stocks received a helping hand from the Fed last week, as the charitable contribution uplifted the precious metals. However, while the central bank achieved its objective and talked down the U.S. dollar, prior bouts of short-term optimism faded once reality reemerged. As a result, with the USD Index now in season and the 2012 analogue looking more prescient by the day, gold, silver, and mining stocks will likely suffer profound declines in the coming months. However, with their long-term fundamentals still extremely bullish, new highs will likely dominate the headlines in the coming years.

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

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

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

* * * * *

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

 

E-mini NASDAQ-100 Index (NQ) Futures Technical Analysis – Trying to Establish Support on Pivot at 14954.00

September E-mini NASDAQ-100 Index futures are putting in a mixed performance after giving up earlier gains shortly after the cash market opening. The index is trading inside last Tuesday’s wide range for a fourth session. The price action suggests investor indecision and impending volatility.

At 14:09 GMT, September E-mini NASDAQ-100 Index futures are trading 14974.00, up 18.25 or +0.12%.

After mixed quarterly reports from technology giants last week, the focus now turns to business activity data and the Labor Department’s monthly jobs report this week against the backdrop of fears the fast-spreading variant could hit growth in the second half of the year.

In stock related news, Tesla Inc is trading $721.06, up $33.68 or +4.97%. Applied Materials Inc is at $144.45, up $4.52 or +3.23% and Microchip Technology Inc is trading $147.50, up $4.38 or +3.06%.

On the downside, Zoom Video Communications Inc is at 371.00, down $7.10 or -1.878%.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 15134.00 will signal a resumption of the uptrend. A move through 14445.00 will change the main trend to down.

The minor range is 15134.00 to 14774.25. The index is currently straddling its pivot at 14954.00.

The short-term range is 14445.00 to 15134.00. Its 50% level at 14789.50 stopped the selling last week on July 17.

The best near-term support is a pair of 50% levels at 14546.25 and 14482.00.

Daily Swing Chart Technical Forecast

The direction of the September E-mini NASDAQ-100 Index on Monday is likely to be determined by trader reaction to the pivot at 14954.00.

Bullish Scenario

A sustained move over 14954.00 will indicate the presence of buyers. If the move is able to generate enough upside momentum then look for a retest of the record high at 15134.00. This is a potential trigger point for an acceleration to the upside.

Bearish Scenario

A sustained move under 14954.00 will signal the presence of sellers. If this creates enough downside momentum then look for the selling to possibly extend into the price cluster at 14789.50 to 14774.25.

If 14774.25 fails as support then look for the selling to possibly extend into the pair of 50% levels at 14546.25 and 14482.00, followed by the main bottom at 14445.00.

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

Silver Price Daily Forecast – Silver Retreats Despite Weaker Dollar And Lower Treasury Yields

Silver Is Under Pressure At The Start Of The Week

Silver is currently trying to settle back below the support at $25.30 while the U.S. dollar is losing ground against a broad basket of currencies.

The U.S. Dollar Index has recently managed to get below the 92 level and made an attempt to settle below the support at the 50 EMA at 91.90. If the U.S. Dollar Index gets below the 50 EMA, it will move towards the support at 91.80 which will be bullish for silver and gold price today.

Gold is also moving lower despite weaker dollar and lower Treasury yields. Currently, gold is trying to settle below the support at the 20 EMA at $1810. In case this attempt is successful, gold will get to the test of the key $1800 level which will be bearish for silver and other precious metals.

Meanwhile, gold/silver ratio failed to settle below the 20 EMA at 70.75 and rebounded back above the 71 level. The nearest significant resistance level for gold/silver ratio is located at 71.70. If gold/silver ratio gets to the test of this level, silver will find itself under more pressure.

Technical Analysis

silver august 2 2021

Silver failed to settle above the 20 EMA which is located at $25.55 and is currently testing the support level at $25.30. If this test is successful, silver will move towards the next support level at $25.00.

In case silver declines below the support at $25.00, it will head towards the next support level at $24.70. A successful test of the support at $24.70 will open the way to the test of the next support which is located at the recent lows at $24.50.

On the upside, silver needs to get above the 20 EMA to have a chance to develop upside momentum in the near term. If silver settles above the 20 EMA, it will move towards the resistance at $25.80.

A successful test of the resistance at $25.80 will push silver towards the resistance at the 50 EMA at $26.05. In case silver gets above the 50 EMA, it will head towards the resistance at $26.30.

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

EUR/USD Mid-Session Technical Analysis for August 2, 2021

The Euro is inching higher on Monday in a mostly lackluster trade with investors perhaps already preparing for Friday’s important U.S. Non-Farm Payrolls report that could determine the direction of the single currency over the next several weeks.

Last week, the common currency rose sharply after Federal Reserve Chair Jerome Powell reiterated mid-week that rate increases were “a ways away” and the job market still had “some ground to cover.”

Federal Governor Lael Brainard echoed those comments on Friday, saying “employment has some distance to go.”

At 13:32 GMT, the EUR/USD is trading 1.1879, up 0.0007 or +0.06%.

In economic news, manufacturing activity across the Euro Zone continued to expand at a blistering pace in July as the reopening of the economy led to rocketing demand, but supply bottlenecks sent input costs soaring, a survey showed on Monday.

IHS Markit’s final manufacturing Purchasing Managers’ Index (PMI) dipped to 62.8 in July from June’s record high of 63.4 but was above an initial 62.6 “flash” estimate.

Daily EUR/USD

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through 1.1909 will signal a resumption of the uptrend. A move through 1.1752 will change the main trend to down.

The minor range is 1.1752 to 1.1909. Its retracement zone at 1.1803 to 1.1812 is potential support.

The short-term range is 1.1975 to 1.1752. The EUR/USD is currently trading inside its retracement zone at 1.1864 to 1.1890.

On the upside, a pair of 50% levels at 1.1985 and 1.2027 are potential upside targets.

Daily Swing Chart Technical Forecast

The direction of the EUR/USD on Monday is likely to be determined by trader reaction to 1.1864 and 1.1890.

Bullish Scenario

A sustained move over 1.1890 will indicate the presence of buyers. Taking out 1.1909 will indicate the buying is getting stronger. This could trigger an acceleration to the upside with the next major target a resistance cluster at 1.1975 to 1.1985.

Bearish Scenario

A sustained move under 1.1864 will signal the presence of sellers. If this move creates enough downside momentum then look for the selling to possibly extend into the minor retracement zone at 1.1830 to 1.1812. Since the main trend is up, buyers are likely to come in on a test of this area.

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

USD/JPY Price Forecast – US Dollar Gives Up Early Gains

The US dollar has initially tried to rally against the Japanese yen on Monday but has given back the gains in order to show signs of weakness. At this point, it is very likely that we probably continue to grind a little bit lower, maybe down to the 200 day EMA which is closer to the ¥108 level. That is an area that has been paid close attention to in the past, extending all the way down to the ¥107.50 level. If we do break down below there, the market is likely to go looking towards the ¥105 level after that.

USD/JPY Video 03.08.21

On the other hand, if we were to break above the ¥110.75 level, then I think the market is likely to go higher. That being the case, I think that the area is one that we will also have to pay attention to mainly due to the fact that we have seen a lot of selling pressure in that general vicinity as well. I think the one thing you can probably come away with this with is that the market is probably going to continue to be very choppy and therefore I think it is going to be difficult to hang onto a big position, and therefore I think what we are looking at is a short-term type of situation where we go back and forth on shorter time frames. When I look at this chart, it tells me that we are probably looking for some type of range bound system to take advantage of in this type of choppy environment with more of a look towards the downside than up.

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

GBP/USD Price Forecast – British Pound Gives Up Early Gains

The British pound initially tried to rally during the course of the trading session on Monday but gave back gains rather quickly. By doing so, it looks as if we are trying to poke below the 50 day EMA, and therefore send this market even lower. It is interesting to see that this market cannot seem to break above the 1.40 handle, which is an area that has a lot of psychology attached to it, and of course is an area that has pushed the market back and forth a couple of different times over the last several years.

GBP/USD Video 03.08.21

If we do break down below the 50 day EMA, it is likely that we could drop towards the 1.37 handle. The 1.37 handle is an area where we have the 200 day EMA as well, which of course is a longer-term technical indicator that people will pay attention to determine the trend. On the other hand, if we were to break above the 1.40 handle, the market could go looking towards 1.42 level, which is an area that the market has not been able to break above for ages.

I do not see this happening very easily though, and I think we are much more likely to see this market pullback more than anything else. If we do break down below the 1.37 level, then it is likely that we could go looking towards the 1.35 handle underneath. Regardless, I believe that the US dollar is oversold, and we are starting to see a little bit of balance in multiple markets.

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