Gold (daily) has barely bounced (although gold stocks have been trending up vs. gold for nearly 2 months now) and is trending down and locked below resistance.
The weekly chart shows how important that resistance is. Currently, in not taking out 1675 the gold price is hanging there like a rotting fruit. As long as this resistance holds we can anticipate a drop to the 62% Fib area in the low 1500s off of the double top (my originally projected ‘handle’ ruined long ago). As an outlier in the event the macro really gets off the hook, the extreme for gold would be the 1300s and a test of its bull market (which began when it broke through the gateway at 1378 in 2019.
Silver, on the other hand, is nesting on top of clear support. It too is locked in a downtrend but unlike the rotting fruit above vulnerable to drop, this one is on the ground already.
Here is the weekly chart view showing the basis of that support.
Meanwhile, the Gold/Silver ratio is on another pop while the USD continues to flounder (but importantly, fully retains its uptrend). Suffice it to say that if the GSR bulls again it could pressure the precious metals and probably would continue to diverge the inflation trades. The trend being up, we almost by definition retain a guarded view and realize that the market bounce going on is just that; a bear market bounce as would be indicated if the USD and GSR have not quite completed their anti-liquidity/bearish job just yet.
Markets are flailing left and right, up and down. So are the indicators. It’s an upset backdrop in need of resolution. By that I mean for everything, not just the precious metals. Killing inflation (bond reversals to bullish) or seeing it intensify (yields continue out of control in a ‘crack-up’ scenario) is not going to be easy. Safety is the word until resolution. I speculate a little here and there but they are paying us to stay safe. I try to keep that in mind at all times.
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I consider silver the meme commodity. As such, I assumed that silver would bottom last, after gold (as these are not very informed investors). However, most meme stocks peaked in the first half of 2021, well before the broader market. So I guess silver can bottom before gold as well.
For me it is an indicator. It’s characteristics vs. gold’s characteristics. I have never been and never will be any kind of silver bull. But at some point it’s likely to make a real run and I’d want to be part of that. But this mythical importance the pumpers put on silver is ridiculous. And it’s discount to gold that the pumps tout as a reason to buy is there for a reason. Silver is often a by-product of mining other metals and itself a part industrial metal.
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