Gold and Silver Price Update – Talking Gold with the Pack
Author: Christopher Aaron
British Pound to Hit Parity with US Dollar… Watch Gold Price
What becomes apparent is that the reason the UK pound flash crash occurred last week is because it represents the completion of a massive 24-year Head & Shoulders topping pattern. Dating back from the low of 1.40 from 1993, each segment of the pattern has taken roughly 8 years to complete. Each subsequent 8-year low has seen a declining neckline (shown in black above) tested, up through the latest low post-Brexit at 1.32.
The 1.28 – 1.35 range for the pound shown on the first chart from June through October represented the last consolidation for the pound before the plunge through the neckline confirmed this pattern.
As the amplitude of the head measured 0.76, the ultimate target for this pattern is an equal distance below the neckline, which gives us reason to believe the pound will be breaking below parity with the US dollar over the next eight years and could reach a final target of 0.59. In other words, it may ultimately take only $0.59 US cents to buy one British pound.
The ramifications for gold are significant.
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A Look at Potential Gold Support Levels
Gold has broken lower through two important support levels over the last few days. Where may the next low form?
What are the levels we should monitor that would alert us to a technical failure in the precious metals long-term thesis?
US Dollar is Forming Long-Term Top vs. Euro
We have significant concern that the US dollar is now forming a long-term top. Moreover, we may see a devaluation of up to 50% in value of the dollar over the coming decade. The fundamental backdrop is already in place with the unprecedented money creation by the Federal Reserve since 2008. Confirming technical indicators of a fall in the value of the dollar will be shown through an examination of past dollar-devaluation cycles.
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Watching for a breakout as gold continues to test final downtrend
All eyes continue to focus on the gold market, as long-term downtrend breaks typically result in significant continuation moves when they prove successful.
Includes a comparison to the shorter 2008-2009 downtrend and breakout that formed in gold.
Precious Metals Are Top Performers Since The Fed Rate Hike
On Wednesday September 21, the Federal Reserve released its latest decision on interest rate policy in the United States. The committee left its target rate unchanged at 0.25% – 0.50%, a range which has been in effect since December 2015.
The most notable section of the statement issued at the Fed press conference was, however, not related to the lack of change in interest rates, but rather to the Fed’s expectations for the future. To quote the statement: “The case for an increase in the federal funds rate has strengthened.”
This language is in stark contrast to the words the Fed has used at previous policy meetings this year, which have generally not mentioned such hints for rate hikes pending. The Fed is clearly bracing the markets for a second rate hike, most likely at the December meeting, which would set a range for short-term interest rates between 0.50% – 0.75%.
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Precious Metals — Since the First Fed Rate Hike in 9 Years
The Federal Reserve today did not raise interest rates, but indicated it might do so at the December meeting.
How have various asset classes responded since the last Fed rate hike in December?
What does the history of Fed rate hikes tell us may be in store for precious metals?
The Fed’s Mad Experiment is Not Going to End Well for Bonds
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The Federal Reserve’s mad experiment is going to end badly. There are signs that the beginning of the bursting of the bond bubble is upon us.
For those who have grown up over the last 35 years, normal interest rates are something we cannot fathom. We have been like prisoners in the Fed’s “Plato’s Cave”.
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Apologies for the poor audio quality in the animation. The link to the original, with better quality, is here:
Courtesy Bullhead Entertainment.
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Gold-To-Commodities Ratio Signals Breakout Pending
Our technical model for gold shows that the $1,045 per ounce low in late 2015 was of similar magnitude to the $700 low of late 2008. Consequently, a multi-year advance in price is now in the beginning stages of emerging. The situation in the world’s historic monetary element is extremely tight at present – and because the ramifications for the pending advance are so significant, it is critical for investors to prepare themselves prudently at this juncture.
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Gold & Silver Price Update – The Stage is Set
The stage is set for significant moves in gold and silver… what will the triggers be?
Focus on the GDX gold miners
Today we take a sidestep from the usual analysis on physical metals to zoom in on the action in the gold & silver mining complex, with a focus on the GDX and stage analysis.
Gold & Silver Price Update
Watching for a September Rally
Gold finds itself directly in the crosshairs of a battle between precious metals bulls and bears. The bears are attempting to hold the metal down at this level, because a breach of a long-term trend line would be a major technical event in the eyes of many investors. It would be a signal to the mutual funds and institutions waiting on the sidelines that the 2011-2015 bear market is decisively over.
Having been mostly on the sidelines from 2011-2015, we are in the bullish camp at this juncture. Consequently, have a reasonable expectation that this long-term down trend will be broken in the near future, possibly as early as September.
Why September For A Gold Breakout?
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Signs of a UK bond bubble?
Gold continues to consolidate right below its long-term 2011-2015 downtrend breakout.
Plus, a look at recent news regarding a failed Bank of England bond purchase, and what that means for the psychology of the bond market.
Gold Still Attempting to Break Long-Term Downtrend
Gold is now making a second attempt at breaking out from its long-term downtrend, in place since 2011.
An update on the valuation of the gold mining sector versus the broad economy.
Silver Miners Are Forecasting Higher Silver Prices
Silver miners are now factoring in sales prices for silver of between $21.50 and $36.00, depending on which miner we are analyzing. When we perform this analysis on a wide basket of producing companies, we find a high confluence of targets in the $24.00 – $25.00 spot price level.
The major point is that the primary surge higher off the December 2015 bottom has further to go for silver.
Nearly all major silver miners are pricing in higher spot silver prices for their revenue streams. Although we are now directly within the weakest season for the precious metals (summer), the silver miners are predicting another advance in prices either late this summer or into the fall.
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Gold & Silver Price Update – Gold Approaches Support
Gold’s Long-Term Pattern Targets $2,700
The 2011-2016 decline was a pause in a generational bull market for precious metals.
Current prices will be seen as one of the last great buying opportunities when we look back a decade from now. The bull flag pattern is nearing completion. Moreover, a strong advance above $1,400 will be the trigger that manifests growing recognition for gold as a worthy component of investors’ portfolios. The long-term targets ahead of us are significantly higher than current prices. The ramifications of such targets for silver, the currency markets, and the mining sector will be discussed in future articles.
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Gold Testing Long Term Downtrend Lines
Gold is bumping against its final long-term downtrend dating back to 2011. Meanwhile silver is holding up well above $20, but at some point there will be a retracement… we give the likely targets here.
Generational Opportunities Setting Up
Today we look at the generational opportunities that are setting up in the gold and silver miners… then in gold… and then in silver.
If you are serious about making investments in this sector, this deserves your attention. Come up with a plan, understand the potential, and carry through with it.
Thank you for continuing to tune in. I am extremely pleased with the number of people who have benefited from this information over the last 6-12 months. We are just getting started — violent corrections will be happening, but there is much more potential ahead ahead of us.
Gold Breaks Out Post-Brexit Vote
Gold breaks out from its 18-month consolidation after the Brexit vote. Meanwhile, silver is not too far behind.
The British pound suffers some of the biggest drops seen in currency markets in multi-decades…
Gold’s False Breakout and Claims of $7,000 Gold
Reward vs Risk in Precious Metals
Today we discuss big picture setups for gold and silver, and look at the spectrum of reward vs. risk that exists in the precious metals.
There are significant opportunities ahead but it is critical for individuals to follow an ancient Greek philosophy when it comes to investing in gold or silver…
Silver Surges & Trade Update
Congratulations to anyone who participated with us in this silver trade. A stellar surge was seen today, up over 80 cents from yesterday’s lows. Today we highlight what we expect for both metals over the rest of the summer.
Some people have asked about a service to alert you to trade opportunities in silver such as we saw today. If this is something that interests you, please send an email using the link below, as we are investigating the possibility of something like this for the future:
https://igoldadvisor.com/contact/
Thank you for watching, and best success in the week ahead.
Gold Price Consolidation Points To A Strong Fall Ahead
The grinding nature of gold’s price action, since the surge in February, has left many investors concerned. Why hasn’t the metal continued to build upon the gains of earlier this year?
Nothing in nature moves in a straight line. Gold, a fundamental element of nature, and the markets, being the sum of human nature, are no different.
Consolidations are very healthy for markets. They represent a shifting of ownership from weak hands to strong.
We view any price action above the bottom end of our green highlighted zone at $1,176 to be an ideal setup for a strong continuation move later this year.
The reason? If gold can consolidate during this — the seasonally weakest period of the year — it will mean new demand is showing up in the market even during the months that we typically expect to see buyers largely absent.
Below we show the gold seasonality chart for the past 20 years. Note that demand typically picks up starting mid/late August and remains rather strong through February. Meanwhile, the March – July timeframe usually represents the weakest season for gold.
This is why we believe that if gold can buck the seasonal trend, and merely consolidate through the mid-summer, the precious metals will actually be showing underlying strength — and will be setting up for a significant rally this fall.
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