Weekend update - Monthly Metal Cycles

The precious metals remained largely unchanged in June, although the broader trend remains downward. With the FOMC deciding to only extend QE-twist, rather than full scale QE, the metals remain weak.

On a multi-year scale, both Gold and Silver arguably have giant bull flags.


GLD, 2yr, monthly

SLV, 2yr, monthly

Summary

As is usually the case, Silver was weaker than Gold, and showed a 1% fall, verses a minor 2% gain for Gold. In the bigger picture, these moves rate as mere noise. The main trend remains downward.

I could only get bullish on Gold with a move over $1650, that is around $100 higher than current levels.
Similarly, I can only be bullish Silver with a move over $31/32. As things are, I hold to my moderate deflationary targets of $1300 and $22 for Gold/Silver within the next 3-5 months.

Special note..
Silver could easily break $22..and - as many others also note, the next level would be the rather bizarre $17.50 level, which would probably equate to Gold around $1200/1100.

In the long term of course, so long as the central bankers remain 'on the loose', and are able to hit the QE button as and when they wish, physical metals remain one of the ultimate long term buys.

Daily Bear flags on the metals

With the main equity indexes rising today, the metals again failed to participate. Both Gold and Silver have clear bear flags on the daily charts. There is nothing bullish about the current near term outlook.


SLV, daily

GLD, daily

Summary

Both Gold and Silver look primed for a major snap lower in July. Targets remain $1300 and $22 for Gold/Silver respectively.

It does appear the deflationists will win the ultimate argument that has been going on since the initial financial bow-shock hit in autumn 2008.

Another difficult week for the Metals

With the FOMC deciding to only extend operation twist by six months - and no new 'proper QE', the metals are showing renewed weakness.


GLD, weekly

SLV, weekly

Summary

Primary targets remain on track..$1300 and $22 for Gold and Silver respectively.

It is even possible the metals will see a VERY significant snap lower next week, with SLV falling to 23/22 - if the sp' can break a new low <1266..to around 1225.

July will likely show considerable losses for both metals, where should be approaching their targets. I'd expect the metals will take at least a month or two to form a decisive floor.

A special note, in that if the SP' fails to hold the critical 1100 level - and puts in a new low <1070, then my targets (as low as they already seem) will likely be exceeded.

No QE3...bad summer ahead for the metals

There were surprisingly quite a few traders/analysts looking for some form of QE3 today. Those moderate hopes were all smashed with the decision to merely extend QE-twist. That sort of bond yield curve manipulation will do nothing to raise the equity/commodity markets.

The metals are likely going to have some rough weeks ahead this summer


GLD, weekly

SLV, weekly

Summary

With the FOMC decision out of the way, thinks are much simpler. The current down trend does indeed look set to continue. Targets of $1300 and $22 look very much within range within 2-3 months.

The Gold bugs..are not going to be pleased by early August.

Precious Metals - still in bear flags

With the Greek second election out of the way, the market was somewhat relieved today. Metals were generally flat on the day. The bigger picture - which will not please the Gold 'I can't hear you..la la la la' bugs, remains downward.


GLD, weekly, 2yr

SLV, weekly, 2yr

Summary

Both Gold and Silver remain in very clear bear flags on the weekly cycle. From a MACD cycle perspective, both metals are due to go + cycle in 1-2 weeks. Normally, that would be make for very bullish action ahead. However, if the main equity/commodity markets max out this week, then the metals will FAIL at the zero line..and a very serious fail it will be.

Free fall to summer target zones of $1200 and $20 for Gold and Silver remain the more bearish/doomster outlook.

Precious Metals - The Quiet before the Storm

Trading is relatively quiet in the metals for the past month. There has been only a little volatility, and we now have clear bear flags on the weekly cycle for both Gold and Silver.


GLD, weekly, 2yr

SLV, weekly, 2yr

Summary

I remain holding to broad targets of $1200 and $20 for Gold and Silver respectively later this summer. The underlying thesis is that despite currency concerns in the EU, there are strong deflationary forces in the global economy this year, with both equity and commodity markets set to snap deeply lower in July.

The black doom candle did warn of today!

Once again the black candle of doom was correct in warning of a top in the cycle, both GLD, SLV, and the miners all suffered today - even though the market was showing broad strength for much of the day.

So much for all that hysteria that the Gold Bug maniacs were touting across the web last Friday.


GLD, daily

SLV, daily

Summary

Nothing has changed...if sp'1100 is hit in the coming 1-3 month, that equates to gold $1200... Silver $20. The weekly and monthly cycles still support such an outlook.

Monthly Cycle Update - Metals seeing a bounce

The Gold bugs have been suffering from a mild case of hysteria after Gold jumped almost $60 in Friday trading. Even though Gold managed to close largely flat today, the larger down trends are very much intact.


GLD, monthly

SLV, monthly

Summary

First, lets consider Gold. Friday was indeed the biggest jump in Gold in over 3 years (I think). With GLD closing below the 2008 channel in May, we have ALREADY had a warning of significant downside. I would guess last Friday was just a brief trading anomaly.

Only with a break above 165/170 can I get bullish on Gold.

Downside target remains somewhere in the $1400/1200 range, later this summer.
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As for Silver, the metal remains considerably weaker than Gold. Only with a break above 33/35 can I get bullish on Silver.

Downside target for Silver remains 22/20, possibly as low as $17.50 - if a major deflationary wave is not proactively stopped by the central banks.
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I remain long term bullish on both Gold and Silver, yet we are still due a number of months to consolidate/reset the larger cycles. Arguably, any further declines should be merely seen as a bonus buying opportunity for the physical - certainly rather than 'paper silver/gold'.

Good wishes

Gold finally catches the 'flight to safety' bid

The 12 week decline from 1730 to 1480 for Gold abruptly came to an end today, with a severe ramp of $59 - almost 4%. Once again Silver was weaker, although even Silver still had reasonable gains of 2.5%


GLD, daily

SLV, daily

Summary

With the main equity indexes getting whacked over 2% lower, Gold (and the miners) were a standout today. The old 'flight to safety' issue finally appears to have arisen again. Yet a large part of today's big Gold move was surely technical, with a short-stop cascade to the upside. Considering the weekly and monthly cycles, I'm still not bullish on either Silver or Gold until considerably lower levels of $1200 and $20 respectively.

An update on the monthly cycle, will be issued this weekend.