Gold Forecast – Gold Prices Breaking Out Above $1800 Confirming Next Up leg

Gold is above $1800 and confirmed last week’s outlook for a crucial 40-day cycle low. Prices remain on track for a retest of the $2000 level by July. The next 40-day low is not due until late June, so we see plenty of room for upside near-term.

GOLD FUTURES DAILY: The mid-term gold cycle bottomed on day 37, and prices are just 5-days into a new upswing. With futures clearly above $1800, the uptrends in metals in mines should begin to accelerate.

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Note- The 40-day cycle in gold bottomed on day 37 – slightly early but not surprising given the previous cycle extended to 41-days. On average, we see cyclical turning points about every 39-days.

GOLD MINERS (GDX): After an agonizing 7-month decline, gold miners formed a major bottom in March. In fact, we believe GDX may never return to the $30.00 level again for the remainder of this 10-year bull market.

Currently, miners are attacking the April high ($36.83) and the all-important 200-day MA ($36.99). Once prices push above $37.00, then I think there is a good chance shorts will begin to cover, and we could get the 5%+ bullish recognition day I’ve been expecting. Prices overwhelmingly confirmed last week’s 40-day cycle low, and we are only 4-days into a new upcycle.

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bullish recognition day is when the market suddenly acknowledges a trend change. Traders that were still looking lower get caught on the wrong side and frantically begin to cover. In GDX, this usually looks like a robust 5%+ up day on big volume.

We see tremendous value in high-quality gold producers. These miners are minting money (real money – not Dogecoin) and are incredibly undervalued, in our opinion. Our favorite producer currently is Kirkland Lake.

Silver and platinum are also primed and could explode higher over the coming weeks. Our Premium Metals Portfolio has been accumulating quality miners throughout the pullback and is well-positioned for this next advance.

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

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

Silver Price Forecast – Silver Markets Continue Bullish Pressure

Silver markets initially drifted a little bit lower during the trading session on Thursday but then broke higher to reach towards the $27.35 level. The market certainly looks as if it is on its way to the $28 level, but it is obvious that the market has a lot of noise involved in it. After all, the silver markets do tend to be very choppy to say the least, so it does make quite a bit of sense that we would continue to see volatility. With that being the case, the market is likely to continue seeing short-term pullbacks as potential buying opportunities and of value.

SILVER Video 07.05.21

Underneath, we have the 50 day EMA sitting at the $26 level, and that could of course attract a lot of support and buyers get involved. If we break down below the $26 level, it could open up a move down to the 200 day EMA underneath. We are in an uptrend, there is nothing on this chart that tells us that we should be looking for buying opportunities only, and a break above the $28 level would open up the possibility of a move to the $30 level. All things been equal, I do think that we get there and perhaps even higher as we continue to play the “reflation trade.” Silver has a major industrial component built into it, so it certainly makes a bit of sense that we would be looking at a “buy on the dips” type of scenario. I have no interest whatsoever in shorting this market, as we have such bullish pressure and of course a huge fundamental driver of price.

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

Silver to $300

No, I haven’t lost my mind. After all, it’s a metal that’s known for massive rallies.

You see, when silver went trough its 1970s bull market, it started from a low of $1.31 in October 1971. By the time it reached its peak in 1980, silver had run all the way up to $49. That was a 37x return.

If we consider that silver was priced at $4.20 in late 2001, a 37x return would take it to about $155. However, I think this bull market could be an order of magnitude larger for a number of reasons, the main ones being debt, credit and money printing.

As a result, I think silver’s ultimate peak could be $300, and I won’t rule out possibly even higher.

Bullish Silver Fundamentals

Most developed and many developing nations have been in multi-year or even multi-decade deficit scenarios. This now looks to have become a permanent state, at least until we reach some sort of global financial reset.

The Institute of International Finance explains how the COVID-19 pandemic response added $24 trillion to the global debt mountain last year, to reach a new all-time record high of $281 trillion.

And interest rates being maintained at 5,000-year lows will only encourage more debt. Couple that with many countries borrowing to meet interest payments, and central banks soaking up much of that new sovereign debt, and inflation havens like precious metals gain strong appeal.

Silver in particular has the added benefit of 50% of its demand being industrial. With unprecedented economic stimulus programs, many favoring green energy, silver is uniquely positioned to profit. What’s more, according to Metals Focus, silver supply was down 4% in 2020 by 42M ozs. According to the Silver Institute, total supply will rise by 8% this year, though total demand will rise nearly twice as much, by 15%, led by industrial, jewelry and physical demand.

So the fundamental side of silver demand is looking strong, but the technical side is also very bullish.

Bullish Silver Technicals

Let’s consider the gold silver ratio.

As a quick refresher, the gold silver ratio is calculated by simply dividing the spot price for one gold ounce by the spot price of one silver ounce. That’s it. Naturally the higher the ratio, the more silver ounces are needed to buy one gold ounce, and vice versa. The most bullish scenario is when the ratio is falling from a high level, ideally from above 80, and the silver price is rising.

Here’s a chart of the gold silver ratio during the 1970s silver bull market.

To me it’s very intriguing to note how recessions, which are the grey vertical bars, tended to mark troughs and/or peaks in the ratio. What’s also interesting is that when silver reached its peak in 1980, the gold silver ratio ultimately bottomed around the same time at a level near 15, which was below the starting point near 20.

Let’s now move to the current silver bull market which I believe began in 2001. The following chart shows us silver prices since 2000, not adjusted for inflation.

Of course, silver had a tremendous run from $4.20 in 2001 to its 2011 peak at $49. It then corrected until late 2015, then moved sideways until bottoming near $12 last year in March. It had a tremendous move up to $30 within just 5 months and has been mostly consolidating since.

Now let’s examine the gold silver ratio action since 2001.

Again we see peaks and troughs tend to occur (though not exclusively) around recessions (grey bars). At silver’s peak in 2011, the ratio bottomed near 33. It then rose almost constantly up to its all-time peak last March at 125, then fell dramatically to its current level around 67, as silver started to significantly outpace gold. Consider that we know from history silver always outperforms gold in precious metals bull markets. So the current action is particularly exciting for silver.

Silver Targets

But what does it all mean for how high the silver price can go? Of course, no one knows for sure. But there are some indicators worth examining for clues and suggestions.

I believe the ratio will ultimately reach a low near 15. And given the inflationary path we’re on, I think gold could peak at $5,000 per ounce. That’s just 2.5 times last August’s peak near $2,000. In fact, I think there’s even a decent chance gold could reach $10,000, which is just 5 times last August’s peak. But if we stick with $5,000, and an ultimate bottom in the gold silver ratio of 15, we get ($5,000/15) $333 per ounce of silver.

Let’s look at silver price targets from another angle: inflation.

If we consider inflation-adjusted silver prices going back to 1970, we see that the peak reached in 1980 was actually $120/ounce in today’s dollars, and that’s using government sanctioned inflation statistics, which tend to be well below what we experience in everyday life.

Considering the old way of calculating inflation, which the U.S. abandoned decades ago and I reference below from Shadowstats.com, a realistic inflation rate would have averaged 7% – 8% since 1980 (triple official inflation), which would mean an equivalent silver price of $240-$360 dollars at the 1980 peak.

My gold silver ratio target for silver of $333 is comfortably within the range of $240-$360. If we take the mid-way point between $240 and $360, we get $300. I think that’s as good an estimate as any of where silver can peak in its current bull market.

On this basis, the silver price would need to be up by more than 10x from current levels to reach its ultimate high. Imagine for a moment, if silver were to soar tenfold from here, what the silver producers’ and silver explorers’ share prices would do. It’s not difficult to expect simply spectacular returns. Which is exactly why it’s so attractive to allocate to this space, while being diversified across several stocks, as it’s impossible to know which will do best. Still, odds are very good that if silver goes up by a factor of 10, the average silver stock should easily double that, and be up by a factor of 20, while the most successful juniors could gain 50x or more. That would simply be a repeat of previous bull markets.

Larger silver producers and royalty companies should be seen as core positions to be held for the long term. The more junior explorers should be treated more cautiously as speculations, on which to take profits when they materialize. Selling half of one’s position on a double would be especially sensible.

In any case, I believe it remains early days for silver and silver stocks. I expect to see much higher prices ahead in the metal and the equities. And in my view the current bout of weakness is an opportunity to buy or add to positions in this space. Remember, at $26 silver is still nearly 50% below its all-time nominal high, while gold is just 10% below its all-time nominal high. Silver is clearly the better relative bargain.

In the Silver Stock Investor newsletter, I provide my outlook on which silver stocks have the best prospects as this bull market progresses. Many offer 5x to 10x return potential in just the next few years, especially as silver heats up.

I think silver is currently at or very close to its bottom, but that its ultimate peak could well be in the $300 range.

Either way, silver is headed much, much higher.

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

Gold & Silver Begin New Advancing Cycle Phase

Before going into detail regarding my latest research and cycle phases, I want you to think of these cycle phases as Advancing and Declining cycle trends.  They act as a “build-up of trend”, then an “unwinding of trend”.  In each instance, trends can be either Bullish, Bearish, or Neutral in nature.  My research team and I believe a new Bullish Cycle Phase has begun in Gold and Silver.  If our research is correct, the next Advancing Cycle Phase may prompt a broad rally in Gold and Silver.

Understanding Cycle Phase Analysis & Trends in Metals

We interpret these cycle phases as unique trend segments involved in a broader cycle scope.  For example, over a longer-term rally, we may see many Bullish Advancing and Declining cycle phases take place – one after another.  Conversely, we may see many Bearish cycle phases take place in an extended downtrend.  Another type of cycle phase can also exist, the Reversal Cycle Phase – where price Advances in one direction and Declines in the opposite direction.  This type of Rotation Cycle Phase exists as the current completed Cycle on the Gold chart, below.

As we are nearing the end of the current Declining Cycle Phase as seen in the chart below, we will soon begin the new Advancing Cycle Phase in Gold.  Gold’s Reversal Cycle Phase that took place between December 21, 2020, and May 10, 2021, will likely close higher than the midpoint (or Apex) of the total Cycle Phase.  This suggests a new bullish price trend has taken over and the price is more likely to move higher in the next Advancing Cycle Phase. If this trend continues, then the price will continue to rally higher in the Declining Cycle Phase as well – as we saw in the first Cycle Phase: between March 16, 2020, and August 3, 2020.

Gold & Silver Phase Tables – Will Price Continue A New Bullish Cycle Phase?

To help explain our Cycle research, we’ve put together these tables to detail the Cycle Phases and price logic we use to interpret each Advancing and Declining phase.  Each table entry consists of an Advancing, then Declining Cycle Phase.  Combined, they make up a complete Cycle Phase.  We are measuring price at the midpoint (Apex) of the Cycle Phase to determine if any Advancing or Declining Cycle Phase is Bullish or Bearish in trend.  If both Advancing and Declining Cycle Phases show the same trend direction, we define that completed Cycle Phase as Bullish or Bearish.  If they differ in trend types, we define that completed Cycle Phase as a Reversal Phase.

Gold has been in a downtrend recently while Silver has continued to stay somewhat bullish in a sideways price trend.  You can see from the tables below, Gold recently completed a Reversal Cycle Phase (ending with a Bullish Declining Phase) while Silver has continued to exhibit Bullish Cycle Phases since March 9, 2020.

Both Gold and Silver ended their last completed Cycle Phases recently.  Gold will end the last completed Cycle Phase on May 10, 2021.  Silver ended its last completed Cycle Phase on April 12, 2021. The next Advancing Cycle Phase for both Gold and Silver will begin this week and next week – and will continue until July 19, 2021.  After that, the Declining Cycle Phase will begin and last until late September, for Gold, and late October for Silver.

If our research is correct, we may see extended bullish trending over the next 6+ months in both Gold and Silver.

Silver Cycle Phases Continue To Show Stronger Bullish Trending

The following Silver Weekly Chart highlights the Cycle Phases and highlights the price trends for each Advancing and Declining Cycle Phase.  While Gold has experienced an extended Bearish Cycle Phase over the past 5+ months, Silver has continued to show stronger bullish price Cycle Phases and continues to attempt higher closing price levels at the end of each Cycle Phase.  We believe this suggests Silver is likely to see some explosive upside price trending when the $28.42 level (the higher YELLOW line) is breached.  This level represents historical price resistance for Silver.  Once this level is breached, we believe Silver will begin to advance higher very quickly.

Remember, we have until July 19, 2021, before the first Advancing Cycle Phase in Silver ends.  This Advancing Phase may prompt a move above the $28.42 level and may attempt to rally above $30.00 as we have drawn on the chart (below). If the Declining Cycle Phase continues this bullish trend, we may see Silver trading above $32.00 ~ $33.00 before Halloween 2021.  This would represent a +26.5% rally in Silver from the last completed Cycle Phase price level.

In closing, we want to suggest that a rally as we are proposing in Gold and Silver will also present a renewed risk factor for the US and global markets (potentially). In the past, we have seen precious metals rally while the US stock market rallies.  It is not uncommon for precious metals to begin to move higher while the US stock market continues to move higher.  This type of price activity simply suggests that global traders/investors are moving capital into Precious Metals as the US stock market climbs a strengthening “wall of worry”.  This type of price action happened from 2004 to 2009 – prior to the Credit Crisis/Housing Crisis.

As we’ve been suggesting for many months, the next few years are going to be full of incredible opportunities for traders and investors. Smart traders will quickly identify these phases of the market and will understand how to position themselves to take advantage of this next phase. You can learn more about how I identify and trade Gold, Silver, and the markets by watching my FREE step-by-step guide to finding and trading the best sectors.

For those who believe in the power of trading on relative strength, market cycles, and momentum but don’t have the time to do the research every day then my BAN Trader Pro newsletter service does all the work for you with daily pre-market reports, proprietary research, and trade alerts. More frequent or experienced traders have been killing it trading options, ETFs, and stocks using my BAN Hotlist ranking the hottest ETFs, which is updated daily for my premium subscribers. Sign up today!

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

Happy Trading!

Chris Vermeulen
Founder & Chief Market Strategist
www.TheTechnicalTraders.com

Silver Price Daily Forecast – Resistance At $27.50 In Sight

Silver Video 06.05.21.

Weak Dollar Provides Support To Silver

Silver gained upside momentum and managed to get above the resistance at $27.00 while the U.S. dollar remained under pressure against a broad basket of currencies.

The U.S. Dollar Index failed to settle above the resistance at the 20 EMA at 91.30 and is testing the support at the 91 level. In case the U.S. Dollar Index declines below this level, it will move towards the support at 90.70 which will be bullish for silver and gold price today. Weaker dollar is bullish for precious metals as it makes them cheaper for buyers who have other currencies.

Gold is currently testing the resistance at the $1800 level. In case gold manages to settle above this level, it will head towards the resistance at $1820 which will be bullish for silver.

Gold/silver ratio managed to get below the 67 level and is trying to settle below 66.50. If gold/silver ratio declines below this level, it will move towards the 66 level which will be bullish for silver.

Technical Analysis

silver may 6 2021

Silver managed to get above the resistance at $27.00 and is trying to gain additional upside momentum. If silver settles above this level, it will move towards the resistance at $27.50. RSI remains in the moderate territory, and there is plenty of room to gain additional upside momentum in case the right catalysts emerge.

A successful test of the resistance at $27.50 will push silver towards the next resistance level at $27.75. If silver gets above the resistance at $27.75, it will head towards the next resistance which is located at $28.30.

On the support side, a move below the $27 level will push silver towards the support at $26.65. In case silver declines below this level, it will head towards the support at $26.30.

A successful test of the support at $26.30 will push silver towards the support which is located at the 20 EMA at $26.15. In case silver manages to settle below this level, it will head towards the next support at the 50 EMA at $25.95.

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

Daily Gold News: Thursday, May 6 – Gold Bouncing Back and Forth

The gold futures contract gained 0.47% on Wednesday, as it extended its short-term consolidation. In early April the market has bounced from the support level marked by March 8 local low of $1,663.30. The yellow metal’s price was the lowest since last year’s June. Today gold is trading closer to the recent local highs, as we can see on the daily chart (the chart includes today’s intraday data):

Gold is 0.3% higher this morning, as it is trading closer to $1,800 price level. What about the other precious metals? Silver is 1.0% higher, platinum is 0.8% higher and palladium is 0.8% lower today. So precious metals are higher this morning.

Yesterday’s ADP Non-Farm Employment Change release has been worse than expected at +742,000. The ISM Services PMI has also been worse than expected at 62.7. Today we will get the Unemployment Claims release, among others.

The markets will be waiting for tomorrow’s monthly jobs data release.

Where would the price of gold go following Friday’s NFP release? We’ve compiled the data since September of 2018, a 32-month-long period of time that contains of thirty two NFP releases. The first chart shows price paths 5 days before and 10 days after the NFP release. The last three cases are marked with dashed lines. Gold gained 1.92% in April and it gained 2.54% in March.

The following chart shows the average gold price path before and after the NFP releases for the past 32 months. The market was usually advancing ahead of the release day and closing 0.49% higher on the 10th day after the NFP release.

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

Thursday, May 6

  • 7:30 a.m. U.S. – Challenger Job Cuts y/y
  • 8:30 a.m. U.S. – Unemployment Claims, Preliminary Nonfarm Productivity q/q, Prelim Unit Labor Costs q/q
  • 1:00 p.m. U.S. – FOMC Member Bostic Speech

Friday, May 7

  • 6:00 a.m. Eurozone – ECB President Lagarde Speech
  • 8:30 a.m. U.S. – Non-Farm Employment Change, Unemployment Rate, Average Hourly Earnings m/m
  • 8:30 a.m. Canada – Employment Change, Unemployment Rate
  • 10:00 U.S. – Final Wholesale Inventories m/m
  • 10:00 a.m. Canada – Ivey PMI

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.

 

Moneta Markets Launch Revamped Affiliate Partner Program!

As Moneta Markets continue to disrupt the FX and CFD industry, the revamped Partnership model rewards Affiliates with up to $1200 for deposits of $1000 or more. With three CPA plans to choose from, as well as an exclusive ‘Platinum’ model for their premium affiliate partners, Moneta Markets’ new program looks to set to change the landscape of the Forex affiliate industry.

When asked about the revamped CPA structure, Moneta Markets’ founder David Bily said that to stand out in an already crowded industry, you need to constantly evolve and innovate based on observations and of course, ongoing feedback from clients and partners alike.

Moneta Markets’ founder David Bily

“We created our new CPA model with two simple goals, to have tailored plans that better suit the type of traffic that partners choose to target, and to reward our most successful affiliates. By offering three CPA plans, Gold, Silver and Bronze, we can cater to affiliates of all types. No other broker in the industry offers this level of flexibility. And, with up to $1200 CPA on offer for deposits of $1000 or more, that makes us one of the highest paying forex brokers for affiliates.

“On top of the multiple payment structures, we have also created a new “Platinum” plan for affiliates who are bringing in high-quality traffic on a consistent basis that will reward them even more. On top of their CPA payments, Platinum partners will receive ongoing rebates on Forex in perpetuity, bi-weekly payouts, prepayments as well as a range of other exclusive benefits. We value the work of our partners, and it is important that we continue to build on these relationships and reward our affiliates accordingly.

“Our software providers and technology partners have also had a vital role in helping us to create a fully integrated system that streamlines each individual component of our Affiliate Partner program. By working closely with the team at Panda and Praxis, we have been able to create a system that allows fast client onboarding and account funding. And, by integrating the CellXpert platform with the Moneta Markets Client Portal and WebTrader platform, affiliates can access transparent reporting of payouts and rebates, powerful tracking, optimization and a comprehensive range of multilingual marketing materials that are optimised to convert, and to help partners reach traffic on a global scale. And, in an environment where we are seeing significantly more mobile traffic, we have integrated AppsFlyer into our AppTrader mobile platform for increased lead attribution, offering affiliates additional avenues to improve their earnings.”

In addition to the launch of their Affiliate program, Moneta Markets has also significantly reduced spreads across all instruments, a feature that affiliates are now leveraging when marketing the brand.

“We want to make it so that our partners can promote a superior product to our competitors, and with that in mind we are constantly looking to improve our offering. Recently, we have introduced new account types STP, True ECN and Moneta Prime, all of which offer some of the lowest spreads in the industry across not only Forex pairs, but all our Indices and Commodity products. Many brokers claim to have low spreads, but very few can live up to that promise. I can say with confidence that Moneta Markets’ spreads are much lower than our direct competitors, with the majors currency pairs and Indices averaging 0.0 pips.”

With the addition of multiple account types as well as offering multiple trading platforms to choose from, MetaTrader 4, MetaTrader 5, and their next-gen WebTrader platform, Moneta Markets continues to appeal to an expanding audience, living up to its reputation as not only the preferred partner for Affiliates, but as the broker to keep an eye on throughout 2021! To find out more about the broker’s first of its kind CPA Affiliate program, click here.

U.S Treasury Secretary Janet Yellen Speaks – Part Two

To paraphrase she said that interest rates in the United States may need to rise to prevent the economy from overheating. Yellen said that the overheating is a direct result of the current administration’s economic investment programs become enacted.

“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” she said in taped remarks to a virtual event put on by The Atlantic. “It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them.”

She explained the massive amount of fiscal stimulus with an outlay of $4 trillion in 2020, and $1.9 trillion to date this year, and when coupled with President Joe Biden’s proposed “American Jobs Plan” could add even more debt to the ballooning national debt the currently exists. Although the administration has explained that there would be no cost to middle-class Americans, many advocates of his initiative to leave that the cost cannot be covered by raising taxes on corporations and the wealthiest alone. In fact, it is believed that it would further add to our national debt which is now at record levels.

That caused gold and silver pricing to sustain a large drawdown in trading yesterday and today. Yellen clarified her remarks when she spoke at the Wall Street Journal’s CEO Council summit. She said that she was not recommending or predicting that the Federal Reserve should raise rates. Furthermore, she said that she does not see a sustained problem for the economy as it bounces back from Covid-19 and therefore does not anticipate inflation being a problem.

On a technical basis the facts remain that gold has been mired in an extremely narrow range with current support at the 21-day exponential moving average, and resistance currently at a harmonic (a harmonic is when to different technical studies occur at the same price point) which occurs at the 100-day moving average currently fixed at $1797.10 and $1800 which is a key psychological level. Gold has traded in this to find a narrow range over the last 15 trading days and continues to move sideways.

Today’s statements by Janet Yellen in attempts to clarify her statements made yesterday did move gold higher by approximately $10 it is currently fixed in Australia up $2.60 at $1786.90. This is still shy by $13 of major resistance at $1800. All things being equal it will take a dramatic fundamental shift, or a dramatic change in market sentiment to move gold pricing above or below its defined range.

Chart_21-05-05_12gold May 5

For more information on our service, simply use this link.

Wishing you, as always, good trading and good health,

Gary Wagner

 

Silver Price Forecast – Silver Pulls Back to 50 EMA Only to Find Buyers

Silver markets have rallied a bit during the course of the trading session after initially falling on Wednesday to find the 50 day EMA important enough to hang onto. The 50 day EMA sits at the $60 level, so that of course comes into focus as well. It is an area that has been supportive for a couple of weeks now, and it certainly looks as if silver is trying to stabilize currently. With that being the case, I like the idea of buying dips, but I recognize it is probably going to take a while to get to where we are going.

SILVER Video 06.05.21

If we did break down below the 50 day EMA, I think that the 200 day EMA then comes into focus, currently sitting at the $24.50 level. We also have the psychological barrier in the form of the $25 level, so I do think that in general we continue to find value hunters, but this is based upon the reopening trade, and not so much the US dollar as of late. In other words, it does have a fundamental catalyst to go looking towards the $28 level, but it is going to be a grind more than anything else. Because of this, I think you should keep your position size relatively small and billed as the trade goes in your favor. Shorting is not something I am interested in doing currently.

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

GM Profit Shrugs Off Chip Shortage with High-Priced Pickups, SUVs

By Nick Carey and Ben Klayman

The Detroit automaker, whose shares were up 3.3% in early trading, also said its full-year pre-tax profit would come in at the high end of its forecast.

“The speed and agility of our team are front and center as we move from managing through a pandemic to managing the global semiconductor shortage,” Chief Executive Mary Barra said in a letter to shareholders. “This remains a challenging period.”

Barra added the No. 1 U.S. automaker was focused on “maximizing production of high-demand and capacity-constrained vehicles” like the full-sized Chevrolet Silverado pickup, and GMC Yukon, Chevy Suburban and Cadillac Escalade SUVs.

Barra told reporters the chip shortage will worsen in the second quarter before improving in the second half of the year.

“Every region in the world has been dealing with the supply and demand imbalance for semiconductors, and we have been working through some significant disruptions to production,” she said.

GM reiterated its full-year 2021 earnings guidance and said “based on what we know today,” its results will be at the upper end of the $10 billion to $11 billion adjusted pre-tax profit it has previously forecast. Morgan Stanley analyst Adam Jonas said GM’s profit and full-year forecast were a relief after Ford Motor Co’s warning last week about the expected chip hit.

GM stuck to earlier forecasts the chip shortage could shave $1.5 billion to $2 billion from this year’s profits.

Carmakers across the world have had to curb output, hampering their attempts to recover from the COVID-19 pandemic, due to a shortage of vital chips used in everything from computer management of engines to driver assistance systems.

Stellantis, created from the merger of PSA and Fiat Chrysler, on Wednesday said it expects the shortage to take a bigger bite out of second-quarter production and warned the disruption could last into 2022.

Ford said last week it expects second-quarter vehicle output to be halved by the shortage.

Evercore ISI analyst Chris McNally asked in a research note why Ford was potentially expecting a bigger second-quarter production hit than GM, which he joked stood for “Good Morning” after the strong results.

Thanks to high consumer demand that has pushed up prices, focusing on those high-margin models contributed $3.2 billion to GM’s first-quarter pre-tax profit.

While GM has continued to build its highest-profit vehicles, it has hoarded supplies of chips by idling other factories. Last week, it extended downtime for plants in Kansas and Ontario into early July and late June, respectively, curtailing output of the Cadillac XT4 and Chevy Equinox SUVs, and the Chevy Malibu sedan.

GM posted a first-quarter net profit of $3 billion, or $2.03 per share, up from $294 million or 17 cents per share, a year earlier. Excluding items, it earned $2.25 per share, well above analyst expectations of $1.04.

GM said its capital spending budget this year will be $9 billion to $10 billion, and Barra said about $7 billion of that would be focused on electric and autonomous vehicle development.

(Reporting by Nick Carey, editing by Nick Zieminski and Steve Orlofsky)

Will Gold Break Back Above $1800 Before Silver Breaks $27?

The major macro event that traders will be closely watching this week is Friday’s U.S Employment Report, which is the most highly anticipated economic report of every month. It’s also a gauge of economic performance and a key measure of inflation tracked by the Federal Reserve.

So far this year, the Fed has maintained their stance to allow inflation to run hotter than its traditional 2% goal as it pursues full and inclusive employment.

The major risk of this approach is if the Fed gets too fixated on concrete evidence of a solid labour market recovery, it could end up behind the inflation curve.

If you’re wondering just how high inflation could get, you only have to take a look at what is happening across the rest of the commodity markets.

Copper, Palladium, Iron Ore and Lumber prices have skyrocketed to all-time record highs in recent weeks. In total 23 Commodities ranging from the metals, energies to soft commodities have tallied up double to triple digit gains within the in the past year.

All of this suggests one thing – it’s only a matter of time before Gold eventually catches up with the rest of the commodities complex.

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

NASDAQ: The Leaders Lead. Or Attempt to, and Fail.

The tech stocks were the strongest part of the stock market in the previous year or so, and for a good reason. Due to the lockdown-induced surge in remote work, the need for all sorts of tech improvements (in both: software and hardware) soared. So, it’s no wonder that the NASDAQ was the strongest part of the market. It was the sole leader.

Now, there’s a rule in every market that leaders… Well, lead. This makes perfect sense, no surprise yet. But, there’s a point after which the leaders stop leading and stocks that are relatively weak or have less favorable fundamentals are catching up, eventually rallying more than the leaders. Why would this be the case? Because those who understand the markets and what’s going on are already invested, and those who are neither as knowledgeable nor experienced – the investment public – enter the market.

The investment public makes purchases often without any regard to fundamentals (or technicals) – they buy because a given asset seems cheap compared to other assets. And what would be cheap in the final part of the upswing – after the market professionals have already established their positions in well-positioned assets? The poorly positioned assets. The stocks/markets that were – for a good reason – neglected previously. So, they start buying those, and the laggards become the new leaders.

The NASDAQ was the leader that started to underperform while other stocks soared. The last few months were as clear as it gets in terms of emphasizing that. While the S&P 500 Index soared to new all-time highs, the only thing that the tech stocks managed to do was to attempt to break to new highs.

Attempt.

And fail.

Last week’s shooting-star-shaped weekly reversal was bearish on its own, but considering that it was also a failure to break to new highs, the bearish fire got gasoline poured over it.

Now, this could have been accidental, and it was prudent to wait for another decline before stating that the top in the stock market is most likely in…

Until we saw yesterday’s slide. The NASDAQ is already over 2% lower this week, and it’s only after two sessions.

Why is this important? Because if we have indeed seen a major top on the stock market , then it tells us a lot about the next moves on the precious metals market. And – in particular – about mining stocks.

The history might not repeat itself, but it does rhyme, and those who insist on ignoring it are doomed to repeat it.

And there’s practically only one situation from more than the past four decades that is similar to what we see right now.

It’s the early 2000s when the tech stock bubble burst. It’s practically the only time when the tech stocks were after a similarly huge rally. It’s also the only time when the weekly MACD soared to so high levels (we already saw the critical sell signal from it). It’s also the only comparable case with regard to the breakout above the rising blue trend channel. The previous move above it was immediately followed by a pullback to the 200-week moving average, and then the final – most volatile – part of the rally started. It ended on significant volume when the MACD flashed the sell signal. Again, we’re already after this point.

The recent attempt to break to new highs that failed seems to have been the final cherry on the bearish cake.

Why should I – the precious metals investor, care?

Because of what happened in the XAU Index (a proxy for gold stocks and silver stocks ) shortly after the tech stock bubble burst last time.

What happened was that the mining stocks declined for about three months after the NASDAQ topped, and then they formed their final bottom that started the truly epic rally. And just like it was the case over 20 years ago, mining stocks topped several months before the tech stocks.

Mistaking the current situation for the true bottom is something that is likely to make a huge difference in one’s bottom line. After all, the ability to buy something about twice as cheap is practically equal to selling the same thing at twice the price. Or it’s like making money on the same epic upswing twice instead of “just” once.

And why am I writing about “half” and “twice”? Because… I’m being slightly conservative, and I assume that the history is about to rhyme once again as it very often does (despite seemingly different circumstances in the world). The XAU Index declined from its 1999 high of 92.72 to 41.61 – it erased 55.12% of its price.

The most recent medium-term high in the GDX ETF (another proxy for mining stocks) was at about $45. Half of that is $22.5, so a move to this level would be quite in tune with what we saw recently.

And the thing is that based on this week’s slide in the NASDAQ that followed the weekly reversal and the invalidation, it seems that this slide lower has already begun.

Wait, you said something about three months?

Yes, that’s approximately how long we had to wait for the final buying opportunity in the mining stocks to present itself based on the stock market top.

The reason is that after the 1929 top, gold miners declined for about three months after the general stock market started to slide. We also saw some confirmations of this theory based on the analogy to 2008.

All in all, the precious metals sector would be likely to bottom about three months after the general stock market tops. If the last week’s highs in the S&P 500 and NASDAQ were the final highs, then we might expect the precious metals sector to bottom in the middle of the year – in late July or in August.

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

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

* * * * *

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

 

Daily Gold News: Wednesday, May 5 – Gold Remains Within a Consolidation

In early April the market has bounced from the support level marked by March 8 local low of $1,663.30. The yellow metal’s price was the lowest since last year’s June. Today gold is trading along yesterday’s closing price, as we can see on the daily chart (the chart includes today’s intraday data):

Gold is 0.1% lower this morning, as it is trading within a short-term consolidation. What about the other precious metals? Silver is 0.6% lower, platinum is 1.1% lower and palladium is 0.4% higher today. So precious metals are mixed this morning.

Yesterday’s U.S. Factory Orders release has been slightly worse than expected at +1.1%. Today we will get the ADP Non-Farm Employment Change release at 8:15 a.m., among others.

The markets will be waiting for Friday’s U.S. monthly jobs data release.

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

Wednesday, May 5

  • 8:15 a.m. U.S. – ADP Non-Farm Employment Change
  • 9:30 a.m. U.S. – FOMC Member Evans Speech
  • 9:45 a.m. U.S. – Final Services PMI
  • 10:00 a.m. U.S. – ISM Services PMI
  • 3:00 p.m. U.S. – FOMC Member Evans Speech
  • 6:30 p.m. Canada – BOC Governor Macklem Speech
  • Tentative, Eurozone – EU Economic Forecasts

Thursday, May 6

  • 7:30 a.m. U.S. – Challenger Job Cuts y/y
  • 8:30 a.m. U.S. – Unemployment Claims, Preliminary Nonfarm Productivity q/q, Prelim Unit Labor Costs q/q
  • 1:00 p.m. U.S. – FOMC Member Bostic Speech

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

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

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Disclaimer

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

 

Yesterday’s Advance in Metals Met Strong Resistance Today

In the case of silver, the most active June 2021 contract gained in excess of 4% and moved back over $27 per ounce. Gold gained a respectable 1.34%, and after trading to a high just $2 below major resistance at $1800, closing at approximately $1792 per ounce. Both single-day rallies were short-lived at best, with both metals giving back a substantial portion of yesterday’s gains.

gold May 4

In the case of today gold, is currently trading at $1779 after factoring in today’s net decline of $12.80 (-0.71). In silver, the most active June 2021 futures contract is currently fixed at $26.605, declining $0.35 on the day or -1.31%.

silvermay4.

Many analysts have speculated that the major factor taking the precious metals lower today was a recent statement made by the U.S. Treasury Secretary, Janet Yellen. Today Treasury Secretary Janet Yellen remarked about the current status of interest rates as set by the Federal Reserve’s Fed’s fund’s rate. She went on, stating that interest rates in the United States may need to rise to prevent the economy from overheating. Yellen said that the overheating is a direct result of the current administration’s economic investment programs become enacted.

“It may be that interest rates will have to rise somewhat to make sure that our economy doesn’t overheat, even though the additional spending is relatively small relative to the size of the economy,” she said in taped remarks to a virtual event put on by The Atlantic. “It could cause some very modest increases in interest rates to get that reallocation, but these are investments our economy needs to be competitive and to be productive (and) I think that our economy will grow faster because of them.”

Reuters attributed President Joe Biden’s initiatives which are labeled the “American Jobs Plan,” as the primary reason for Yellen’s comments today.

The Reuters article explains that “Overall the programs, which include stepped-up spending on infrastructure, childcare, and education, will make a “big difference” to inequality, Yellen said. Stocks extended their losses on Tuesday, and the dollar briefly touched session highs after Yellen’s remarks. The yield on 10-year Treasuries pared declines.

Republicans have criticized the proposed tax increases Biden expects to use to pay for his proposals, but Yellen said the effect of a change in marginal tax rates is “much less powerful in influencing growth in either direction,” adding that her aim is to make sure government deficits “stay small and manageable.”

Copper continues its historical climb

Although both gold, silver, and platinum, which compose the majority of precious metals traded on the futures exchange, all traded lower on the day, the industrial metal, copper, continued to reach historical price points. Copper futures basis, the most active July 2021 contract, gained approximately $0.03 in trading today and is currently fixed at $4.5580 per pound.

copper may 4

As we spoke about, yesterday commodity strategists at the Bank of America predict that copper could trade as high as $5.89 per pound ($13,000 per metric ton) within the upcoming months. Their comments posted yesterday in MarketWatch suggest that current stocks of copper will only last 3.3 weeks with demand as it currently stands. While China produces much of the world’s copper, it still is an importer, with 50% of copper used by China mined elsewhere. That coupled with the current infrastructure plans by President Biden suggests that the need for copper will only rise as economies worldwide recover from the recession created by the pandemic and slowly reopen businesses worldwide. With the exception of India and Brazil, the vast majority of countries are beginning to loosen restrictions and open more commerce creating economic growth.

For more information on our service, simply use this link.

Wishing you, as always, good trading and good health,

Gary Wagner

 

Silver Price Forecast – Silver Markets Continue Bullish Run

Silver markets initially pulled back during the course of the trading session on Tuesday but then turned around to break much higher. It looks at this point in time as if the market is likely to go looking towards the upside, perhaps reaching towards the $28 level. After all, the silver market is going to be driven and highly influenced by the reopening trade and of course industrial demand, as silver is an industrial metal.

SILVER Video 05.05.21

Looking at this chart, the 50 day EMA underneath should offer support, as it has over the last couple of weeks, so it certainly looks as if the market is trying to go to the upside. The $28 level has seen a significant amount of selling pressure, where we have pulled back from. If we can break above the $20.10 level, it is likely that the market could go looking towards the $30 level where we had seen a massive barrier. Breaking above that allows several to go much, much higher.

On the other hand, if we pull back in break down below the 50 day EMA, I think at that point the market would more than likely go looking towards the 200 day EMA which is closer to the $24.55 level. All things been equal, this is a market that is in an uptrend for quite a few multiple reasons, and therefore it makes no sense to short this market at all. I think short-term pullbacks will continue to be looked at as potential buying opportunities. The size of the candlestick on Monday is a very bullish sign, and it looks like we will simply continue to go higher based upon that.

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

Silver Takes Charge with Gold a Reluctant Follower

What is our trading focus?

Spot Gold (Ticker: XAUUSD)
Spot Silver (Ticker: XAGUSD)
Gold/silver ratio (Ticker: XAUXAG


Silver broke out of its triangular formation yesterday to record its best day since February 1 when it briefly spiked above $30. Gold meanwhile got rejected once again as it continues to struggle finding enough momentum to break above the key $1800 level. Overnight both trades softer with the stronger dollar off-setting a ten-week low in U.S. 10-year real yields at –0.83%.

Rising growth expectations together with the prospect for governments supported infrastructure plans as well as the green transformation and reflation focus have all helped drive a strong rally across industrial and platinum group metals in 2021. Silver has been caught between two chairs with the market struggling to work out whether the impact from industrial metals should hold a bigger sway than struggling gold. The latter due to its sensitivity towards movements in rates and the dollar, both of which up until recently had been going higher.

On the back of the recent strong performance across industrial metals, silver ended up taking the lead with yesterday’s trigger being the combination of weaker than expected U.S. ISM Manufacturing and higher ISM Prices Paid. The renewed pull from surging industrial metals can be seen through the gold-silver ratio which has been in a downtrend during the past month. From above 70 ounces of silver to one ounce of gold on April 1 it has since declined to a seven-week low at 66.5.

Comment from Kim Cramer Larsson, our technical analyst:
“Silver rallied almost 4% yesterday and closed above the resistance level around $26.65/oz, thereby confirming the uptrend which started back in early April. RSI is above the 60 threshold which support the bullish sentiment and only a close below $25.7 will demolish this short-term bullish scenario.”

Source: Saxo Group

While the double bottom in gold was confirmed on the recent break above $1765, the lack of follow-through and now multiple rejections below $1800 has left traders somewhat bewildered. The short-term technical outlook however still looks promising above $1765 and a break above $1800 could signal a move towards the $1818 and $1833, an area that undoubtedly would begin to shake out long-held trend following short positions.

 

Source: Saxo Group

Ole Hansen, Head of Commodity Strategy at Saxo Bank.

This article is provided by Saxo Capital Markets (Australia) Pty. Ltd, part of Saxo Bank Group through RSS feeds on FX Empire

Silver Price Daily Forecast – Test Of Resistance At $27.00

Silver Video 04.05.21.

Silver Gains Ground Despite Stronger Dollar

Silver managed to settle above the resistance at $26.65 and is testing the next resistance level at $27.00 while the U.S. dollar is gaining ground against a broad basket of currencies.

The U.S. Dollar Index continues its attempts to settle above the resistance level which is located at the 20 EMA at 91.35. In case the U.S. Dollar Index manages to settle above this level, it will move towards the resistance at 91.50 which will be bearish for silver and gold price today.

At the same time, it should be noted that Treasury yields have started to move lower which is bullish for precious metals. This positive catalyst may offset the negative impact of stronger dollar during today’s trading session.

Gold is currently trying to get to the test of the resistance at the $1800 level. A move above this level will push gold towards $1820 which will be bullish for silver and other precious metals.

Gold/silver ratio managed to settle below the support at the 67 level and continues its downside move. The next material support level for gold/silver ratio is located at the 66 level. If gold/silver ratio gets to the test of this level, gold/silver ratio will get more support.

Technical Analysis

silver may 4 2021

Silver settled above the resistance at $26.65 and is trying to get above the next resistance level at $27.00. In case this attempt is successful, silver will head towards the next resistance which is located at $27.50.

A move above the resistance at $27.50 will push silver towards the next resistance level at $27.75. If silver manages to settle above this level, it will head towards the next resistance which is located at $28.30.

On the support side, the previous resistance at $26.65 will serve as the first support level for silver. If silver declines below this level, it will move towards the next support at $26.30. A move below the support at $26.30 will push silver towards the support at the 50 EMA at $25.90.

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

Stocks Set To Open Lower As Traders Continue To Take Profits Near Record Highs

Stocks Move Lower As Traders Wait For Additional Upside Catalysts

S&P 500 futures are losing ground in premarket trading as traders remain cautious at a time when the stock market trades near record levels.

Yesterday, U.S. provided the final reading of Manufacturing PMI report for April which indicated that Manufacturing PMI increased from 59.1 to 60.5 compared to analyst consensus of 60.6. While the report was a bit worse than analyst expectations, it highlighted the strong growth of the U.S. manufacturing segment.

Today, traders will have a chance to take a look at Factory Orders data for March. Analysts expect that Factory Orders increased by 1.3% month-over-month after declining by 0.8% in February. It remains to be seen whether additional economic data will have a material impact on stocks as traders look increasingly focused on valuations as the market remains close to record levels.

WTI Oil Tries To Settle Above The $65 Level

WTI oil managed to get above the $65 level and made an attempt to get to the test of the $66 level as traders remained optimistic about the speed of oil demand recovery despite current problems with coronavirus in India.

Oil traders continue to bet that problems in India will remain an isolated case, and that the driving season will be strong, boosting demand for oil.

API Crude Oil Stock Change report, which is set to be published today, is expected to show that crude inventories declined by 2.19 million barrels. In case crude inventory draw is bigger than expected, oil may get additional support.

U.S. Dollar Rebounds, Putting Some Pressure On Precious Metals

The U.S. Dollar Index managed to settle back above the 91 level and is currently testing the resistance at the 20 EMA at 91.35. It looks that there is some demand for safe haven assets today, which is bullish for the American currency.

Stronger dollar puts pressure on gold and silver which are losing ground despite falling Treasury yields. Shares of miners enjoyed strong support during yesterday’s trading session, but they look ready for a pullback today.

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

Daily Gold News: Tuesday, May 4 – Retracing Monday’s Advance

The gold futures contract gained 1.36% on Monday, as it got back to the recent local highs again.

In early April the market has bounced from the support level marked by March 8 local low of $1,663.30. The yellow metal’s price was the lowest since last year’s June. Today gold is trading lower, as we can see on the daily chart (the chart includes today’s intraday data):

Gold is 0.6% lower this morning, as it is retracing some of yesterday’s advance. What about the other precious metals? Silver is 0.6% lower, platinum is 0.7% higher and palladium is 1.0% higher today. So precious metals are mixed this morning.

Yesterday’s U.S. ISM Manufacturing PMI release has been worse than expected at 60.7. Today we will get the Factory Orders number.

Where would the price of gold go following Thursday’s U.S. Advance GDP release? We’ve compiled the data since January of 2013, an over 8-year-long period of time that contains of thirty three Advance GDP releases. The following chart shows the average gold price path before and after the U.S. Advance GDP releases for the past 33 months. The market was usually going sideways ahead of the release day and closing 0.21% lower on the 10th day after the NFP release.

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

Tuesday, May 4

  • 12:30 a.m. Australia – RBA Rate Statement, Cash Rate
  • 10:00 a.m. U.S. – Factory Orders m/m
  • 1:00 p.m. U.S. – FOMC Member Daly Speech
  • All Day, Japan – Bank Holiday
  • All Day, China – Bank Holiday

Wednesday, May 5

  • 8:15 a.m. U.S. – ADP Non-Farm Employment Change
  • 9:30 a.m. U.S. – FOMC Member Evans Speech
  • 9:45 a.m. U.S. – Final Services PMI
  • 10:00 a.m. U.S. – ISM Services PMI
  • 3:00 p.m. U.S. – FOMC Member Evans Speech
  • 6:30 p.m. Canada – BOC Governor Macklem Speech
  • Tentative, Eurozone – EU Economic Forecasts

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.

 

Gold Forecast – Gold Bottomed as Forecasted and Sets Sights on $1800

Gold bottomed last week in line with our 40-Day Cycle Forecast.

THE 40-DAY GOLD CYCLE: Below you will see gold switched from cycle highs every 40-days (red arrows) to forming cycle lows (green arrows) at the March bottom. We just completed the first 40-day low in a new upcycle, and the trend is set to accelerate once gold retakes $1800.

The 40-day cycle in gold bottomed last week on day 37. Slightly early but not surprising given the previous cycle extended to 42-days. The next 40-day low isn’t due until late June, so there is plenty of room for upside. Overall, gold should climb its way back to test the $2000 level by July or August.

Chart

Description automatically generated with medium confidence

GOLD MINERS (GDX): The 40-day cycle bottomed in line with our expectations. The next low isn’t due until late June, so we have plenty of room to run. I’d like to see a bullish recognition day in miners sometime this week. That will likely occur when gold convincingly retakes $1800. Overall, miners should test and perhaps reach fresh highs in the coming weeks.

Chart

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Note- A bullish recognition day is when the market collectively acknowledges a trend change. Traders looking for lower prices exit shorts and immediately switch to longs. In GDX, this usually looks like a robust 5%+ up day on big volume.

It’s not too late to position for the next leg higher in precious metals. We are only on day one of a new 40-day cycle. Silver and miners have the most near-term potential, in our opinion.

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.