Precious Metals Market Summary
Updated
GOLD
Though 3 days ago the daily close was the highest close since 2013, we stopped the rally.
On the 8 hrs chart above it still seems we are just testing back the triangle but as we are on day 18 time is not working for us.
Today is day 18. I'm expecting a top on the 25-26th day. That would be on or one day ahead of FOMC. The drop back below the triangle's upper trendline would be bearish.
We have ECB rate decision this week what will not help for gold bulls. Any word of Draghi is weakening the euro.
SILVER
XAGUSD is not showing any kind of weakness despite the strong dollar. It is moving out of the bottom of the range breaking the multi year down trendline. I guess JP Morgan's plan was to made an undercut a below 14$ in May but the rate cut speculations and the Gulf tensions had crossed their plans and silver rallied.
XAUXAG ratio seems wants to tag the 200 SMA, so for one or two days silver will outperform. Then gold will rally faster as XAUXAG bounces.
Later this summer I think XAUXAG will print a lower low. It means that at the end of this IC silver spike up to 21 $. The last 2 days can be a 1-1,5 $ day. In this hysteria I'm sure you want to be long with an exploding account.
Can this precious intermediate cycle top here? Anything is possible in this business but history says even if it's a short intermediate cycle we have weeks to go. So whatever happens most probably we will have one more daily cycle with a higher high. But we are getting close to the second daily cycle top here in the following week.
Fundamentals are still in the help of a PM rally here.
1.Tension in the Persian Gulf with the boarding of a british tanker remains high.
2. Traders are waiting for an upcoming interest rate cut by the FED next week : this is extremely bullish for gold, silver, platinum and palladium. (However there is some uncertainty whether the Fed will reduce rates by 0.25% or 0.50% )
The only thing I see is a problem for our precious metal long positions is the Dollar.
Unfortunately every country in the world is trying to weaken its currency to help its export and stock markets.
The 200 SMA/EMA is holding tight this artificial rally in the dollar. I don't know how far can they hold it above the moving average.
The question when the FED will pull out its head from his a*** and say ENOUGH.
I think the first rate cut will be the "E" of this ENOUGH word.
Though 3 days ago the daily close was the highest close since 2013, we stopped the rally.
On the 8 hrs chart above it still seems we are just testing back the triangle but as we are on day 18 time is not working for us.
Today is day 18. I'm expecting a top on the 25-26th day. That would be on or one day ahead of FOMC. The drop back below the triangle's upper trendline would be bearish.
We have ECB rate decision this week what will not help for gold bulls. Any word of Draghi is weakening the euro.
SILVER
XAGUSD is not showing any kind of weakness despite the strong dollar. It is moving out of the bottom of the range breaking the multi year down trendline. I guess JP Morgan's plan was to made an undercut a below 14$ in May but the rate cut speculations and the Gulf tensions had crossed their plans and silver rallied.
XAUXAG ratio seems wants to tag the 200 SMA, so for one or two days silver will outperform. Then gold will rally faster as XAUXAG bounces.
Later this summer I think XAUXAG will print a lower low. It means that at the end of this IC silver spike up to 21 $. The last 2 days can be a 1-1,5 $ day. In this hysteria I'm sure you want to be long with an exploding account.
Can this precious intermediate cycle top here? Anything is possible in this business but history says even if it's a short intermediate cycle we have weeks to go. So whatever happens most probably we will have one more daily cycle with a higher high. But we are getting close to the second daily cycle top here in the following week.
Fundamentals are still in the help of a PM rally here.
1.Tension in the Persian Gulf with the boarding of a british tanker remains high.
2. Traders are waiting for an upcoming interest rate cut by the FED next week : this is extremely bullish for gold, silver, platinum and palladium. (However there is some uncertainty whether the Fed will reduce rates by 0.25% or 0.50% )
The only thing I see is a problem for our precious metal long positions is the Dollar.
Unfortunately every country in the world is trying to weaken its currency to help its export and stock markets.
The 200 SMA/EMA is holding tight this artificial rally in the dollar. I don't know how far can they hold it above the moving average.
The question when the FED will pull out its head from his a*** and say ENOUGH.
I think the first rate cut will be the "E" of this ENOUGH word.
Note
XAUXAG is very close to the 200 SMA
Note
For the further rally we need to close above 1429,5
The green box is the critical area.
Note
Gold is not too much interested in the dollar rally.Note
The biggest problem is still the dollar strength. The ECB is a complete idiot: at some point currency devaluation will not be enough to export your products.
Note
Note
Existing home sales weaker than forecast:We crossed that green river
Note
EurUsd will bounce now. Let's see what XAUUSD is doing in the next few hours.
Are they completely decoupled?
Note
A possible Measured target in gold at 1575:Note
XAUXAG ratio at target.Now it's gold's turn.
Note
One more triangle upper trendline backtest.
Note
XAUXAG plays out as expectedNote
Yesterday I converted 50% of the XAGUSD position to XAUUSD. I think XAUUSD will overperform as we reach the daily cycle top.Note
200SMA bounce is on the way in the XAUXAG ratio.Gold will overperform silver at the FOMC meeting and the following days.
Note
Note
The chart still shows gold will oevrperformNote
Plays out as expected : gold is overperformingNote
Day 24 and still can't break out.The triangle formed into a trendline channel .
It might break out of it but I think it had every chance to break in the last few days.
Trade closed manually
I play it safe and close here.Note
Silver is much stronger just as expected . Note
Silver +4%Gold +2% today
Note
Gold is running out of steam
Note
This is possible that the daily cycle topped out yesterday. We are printing some kind of flag on the four hours chart. If this cannot break higher I say The daily cycle has topped. And even if it breaks higher I say there’s not much left than one or two days . so if you’re all In I definitely would reduce leverage.Note
Breakout of the flag.Note
The XAUXAG ratio is breaking down from the flag. This is the time when silver will start overperforming.Trade closed manually
My recommendation is to close every precious metal position today or tomorrow? Why? We made money from the bottom till today in gold, silver and platinum. Big gains. I don’t want to be a bag holder .
Monday is Labor Day in the USA: holiday.
Note
So today and tomorrow get ready for profit taking in the metal sector. Not many will head into the weekend with big positions when Monday is holiday. But there is mo holiday in twitter though...
Note
If Trump feels tweety on Monday regarding the China deal again you can’t exit your miners long...
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