Gold & Silver Surges Underway; Accelerated Likely into Feb 21 – 25!
02/16/22 Weekly Re-Lay Alert: GC, SI, PL, PA and the Dollar Index Conundrum – “Precious metals and the Dollar Index are reinforcing the seemingly paradoxical relationship they have maintained for many years. Over the past 6 – 12 months, I have received many messages and emails that reinforce the misconception that so many traders have regarding this relationship.
Those messages emphatically claim there is no way I can be correct in expecting the Dollar Index to rally from 1Q ’21 into 2023 and for Gold to basically do the same thing. (One thing to keep in mind: It was never suggested they would move in lockstep, rallying and declining in tandem on a day-by-day and week-to-week basis… only that both would trend higher.)
No matter how many times I try to correct this misperception, the same arguments are raised… even though they lack proper context. While I will review some of that context in future publications, the following are a few more examples (of the dozens of related ones that have already transpired) of this ‘paradox’:
— The Dollar Index AND Gold bottomed in 1Q ’21 and have trended – on balance – higher since then.
— The Dollar Index AND Gold rallied in the first half of July ’21 and then (after intervening corrections) rallied into the first part of Sept ’21 and back to the levels of their respective July ’21 highs.
— The Dollar Index AND Gold set decisive 3 – 6 month/ 6 – 12 month lows in Sept ’21 and have trended higher ever since.
— The Dollar Index AND Gold experienced their sharpest rallies in the first half of Nov ’21 with both markets peaking within a week of each other.
— The Dollar Index AND Gold held their Nov ’21 peaks for at least two months, consolidating in Dec ’21 and the first part of Jan ‘22.
— The Dollar Index AND Gold experienced sharp rallies in the middle half of Jan ’22 with both rallying to ~2-month highs.
— The Dollar Index AND Gold, after surging into Jan 25 – 28, ‘22 and BOTH peaking in that 3-day window, suffered sharp 3 – 5 day sell-offs.
— The Dollar Index AND Gold, since March ’21, have set a series of ascending lows with the Dollar setting new 6 – 9 month highs in the past few weeks… and Gold on the verge of doing the very same thing.
Does that sound like two markets that are trading in direct opposition to one another… as so many traders are convinced is the only possibility??
It does NOT. And the potential for the Dollar to see higher highs later in 2022, while Gold likely sets higher highs later in 2022, does not create a contradiction.
This does not exclude those times when Gold & the Dollar Index do trade in opposition, when one is inversely leading the other. There are a series of opportune moments (sometimes only lasting a few days) – when Gold has been congesting near pivotal highs and the Dollar Index suffers a quick sharp sell-off that is not directly correlated to Gold (or vice-versa).
Those are the times when Gold gets an extra ‘kick in the can’ and is able to surge to new highs while Gold/ Dollar traditionalists get their short-term pay-off (like a slot machine player who is periodically spurred on by inconsequential pay-offs that never alter the overall downward spiral of their ‘trading philosophy’). The current time frame is one of those… that could stretch into next week…
Gold & Silver are fulfilling the ongoing outlook for an overall rally into higher highs on Feb 21 – 28 – the latest phase of Gold’s ~7-week low-low-high-high-(high) Cycle Progression that timed the early-Jan peak. A top at that time would also fulfill the next phase of an overriding 17 – 18 month high (Aug/Sept ’17) – high (Feb ’19) – high (Aug ’20) – high (Jan/Feb ’22) Cycle Progression… Gold could spike significantly higher if this is going to be a (1 – 2 month) blow-off top.
On a much broader basis (3 – 5 & 5 – 10 years), Gold has been trading in a series of wide ranges (300 – 350.0/ GC) – roughly bordered by 1060, 1370, 1680 & 1990/GC. Ever since peaking near 1990/GC in Aug ’20 and plunging to ~1680/GC into March ’21, Gold has then broken down into ranges of ~80.0/GC – with borders at/ near 1680, 1760, 1840 & 1920 (the next would be at ~2000.0/GC, lining up with the broader ~1990.0/GC parameter).
In many respects, the Aug ’20 – Mar ’21 decline has the earmarks of a wave ‘4’ correction, prior to a wave ‘5’ finale (which likely began in March ’21). In late-Sept ’21, major cycle lows corroborated, creating a divergent bottom with Silver, Platinum, XAU and HUI all setting lower lows while Gold held at/above its March ’21 low.
That was expected to usher in a 3 – 6/6 – 12 month (or longer) bottom and the onset of a new impulse wave higher in Gold and other metals. On an intermediate basis, Gold was forecast to rally into Nov 15 – 19 before setting an initial peak.
Subsequent peaks were projected for early-Jan and then a higher high on Feb 21 – 25 ’22. Gold has followed that script closely and is poised to create a spike high in the coming ~week.
On a slightly larger-scale basis, Gold could see higher highs – after a multi-week corrective phase – in April ’22 – when a ~10-month high-high-(high) Cycle Progression recurs. That is also when an 18 – 19-week low-low-low-low-(high) Cycle Progression portends a peak (the midpoint is in the coming days).
Aug/Sept ’22 remains a ~2-year cycle (and the midpoint of the ~50-week low-low-low-(high) Cycle Progression that portends a peak in late-Feb ’22; see INSIIDE Track) that is also likely to time higher highs in Gold & Silver.
The bottom line is that Gold & Silver have the potential to set a sequence of ascending highs in 2022 – even though that does not project a non-stop uptrend. In many cases, a market will consolidate for 80 – 90% of a cycle and then just trigger a quick surge to new highs at the tail-end of that cycle… as Gold has recently done.
The action of the 7-week/14-week cycle is a perfect example of that – with Gold congesting for most of the time between its mid-Nov ’21 peak and the ensuing cycle high in late-Feb ’22.
The final couple weeks of that ~14-week cycle (now) are when a large percentage of the overall price increase is often seen. That could also be the case, moving forward (in the coming months).
On a near-term basis, metals are fulfilling what was described on Feb 5, when Gold was poised to:
‘…trigger a domino-effect of progressive bullish signals – with the daily 21 MAC turning back up, a subsequent daily close above the daily 21 High MAC and the daily trend turning back up’, following a Feb 7 intra-month trend bullish signal.
That is exactly what has transpired with Gold turning its intra-month trend up on Feb 7 and spurring an accelerated surge into the current time frame. The daily & weekly 21 MACs have also been turning positive, corroborating that. More upside is expected.
The XAU & HUI remain in steady recoveries that took hold after longer-term cycles bottomed in late-Sept ’21. Secondary lows were set in mid-Dec. and projected overall rallies into late-Feb/early-Mar ’22 – when weekly cycles converge and portend a 1 – 2 month peak.
That remains the case and they turned their intra-month trends up on Feb 7 – increasing the likelihood for additional upside in the coming days/weeks. Similar to Gold & Silver, that intra-month trend signal triggered a domino-effect of bullish signals that are still in the process of unfolding.
They closed above their daily 21 High MACs as that average was turning higher. That spurred a pullback to the rising 21 Low MAC and a second surge that confirmed strength with another close above the daily 21 High MAC last week.
That also resulted in the XAU & HUI closing the week above their now-rising weekly 21 High MACs and confirming intermediate lows. A continued surge – into next week and potentially into early-March – is expected to ensue. If that is followed by a pullback into March 11, these indexes would be primed for another surge.”
Gold & Silver remain on track for an overall surge into Feb 21 – 25/(28) and to at least 1913 – 1920/GC but could spike up closer to 1990/GC since Gold is perceived to be in a higher magnitude advance. That would further validate the overall outlook for 2022. Short-term cycles & indicators triggered an intervening low and buy signal in late-Jan and Gold then triggered the expected ‘domino-effect’ of bullish signals in the past ~week – ushering in the accelerated phase of its 4 – 5 month advance.
Platinum & Palladium fulfilled major downside objectives in Dec ‘21 and are signaling 6 – 12 month bottoms and the onset of new multi-month advances… as Copper is fulfilling multi-year upside objectives (and could peak in 1Q ’22).
At the same time, stock market cycles and indicators are projecting another sharp sell-off – reinforcing expectations for a tumultuous period in the coming weeks. Right on schedule, war drums are beginning to beat – validating what gold and the stock market have been reflecting in recent months. How high could Gold & Silver spike???
What is Significance of Feb 21 – 25 Cycles in Gold… and Why Should Metals Spike Up into That Time Frame? How Does This Validate Long-Anticipated War Cycles?
Will Gold Reach/Exceed 1920/GC by/in Late-Feb ’22? What about cycles in April & Sept ’22??
Will Stock Market Sell-off Accelerate with Gold/Silver Surge?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.