Friday 28 November 2014

Awaiting a Sunday night surprise

The precious metals ended the week with a major smack down. Across the week, Gold and Silver saw net weekly declines of -2.8% and -5.1% respectively. Near term outlook are for new multi-year lows... with broader weakness into mid 2015.

GLD, weekly

SLV, weekly


Aside from the Friday declines, which were indeed VERY destructive, and a clear reminder of the broader underlying weakness.. there is something rather interesting ahead for this Sunday.

The Swiss are set to vote on increasing their gold holdings. The thing is, the planned 1500 ton purchase program is across 5 years, and is really not that much in the grand picture.. I simply don't think it matters that much to the broader gold market.

There is (not surprisingly) a lot of talk in the gold bug community about how a 'YES' vote outcome would help herald a massive new rally in Gold is imminent, but I just don't see it as particularly important.

Sunday night surprise?

Considering the break of the bear flag today (see GLD/Gold on any daily chart)... best guess is that metals will see further decline early next week. It would not be at all surprising to see a $50/75 decline in the Sunday night futures. Next 'soft target' is the $1090/80 zone, and that could be hit as early as next week.

Holding to core downside targets...

Gold $1000/900
Silver $12/10

Copper will be useful as an indirect guide to when the precious metals (and even oil) have floored.

Copper monthly, monthly

A strong net monthly decline of -6.3% to $2.86. Copper looks set to floor somewhere in the $2.30/20s... in Q1 of 2015....