Gold & Silver on Track for Rally into May 3 – 5; Buy Signals Intact.
04-12-23 – Silver Surge & Inflation ‘Sweet Spot: “Ever since bottoming with weekly & monthly cycles in Sept ’22, Silver has been setting the stage for a second major rally (similar to its 2020/21 advance) – a ‘C’ or ‘3’ wave on a multi-year basis. The Nov ’22 issue of INSIIDE Track emphasized that, stating:
10-31-22 – “Since the early-’21 peak, Silver has declined in a fairly clear 3-wave structure… In Elliott Wave terms, that is a textbook 3-3-5 corrective (‘a-b-c’) wave… This entire decline (Feb ‘21 – Sept ‘22) could be a larger-degree ‘B’ wave decline of a multi-year, upside ‘A-B-C’ correction… if a 1 – 2 year bottom is set near current levels, Silver would likely embark on a new 1 – 2.5-year advance and ultimately exceed its early-’21 high… “
Throughout 2022, Sept ’22 had been identified as the time when Silver was expected to overtake Gold in the magnitude of its gains. It initially validated that by surging right to its 3 – 6 month upside target at 24.50 – 25.00/SI and peaking in early-Jan ’23. That led to a 50% correction (in time), retracing for ~9 weeks after its initial ~18-week advance.
Silver fulfilled all of what was necessary to set an early-March ’23 low as most metals and indexes were portending late-Feb/early-March ’23 lows. On the heels of Gold’s March 5 weekly buy signal and March 8 daily buy signal (and a low in Platinum), Silver began its second advance (wave ‘3’) – the one that is usually the most dynamic:
03-11-23 – “That has resulted in Silver dropping into a ~6-month high-high-(low) Cycle Progression while completing a 50% retracement in time (4 months/18 weeks up, 2 months/9 weeks down).
It also has the potential to perpetuate an ongoing ~6-month/~12-month cycle in Silver that has resulted in 3 – 6 month or 6 – 12 month lows in March & Sept ’20, March & Sept ’21 and Sept ’22… with an intervening peak in March ’22. A low in March ’23 would extend that 180-degree sequence of turning points (mostly lows).
Meanwhile, Gold dropped right to its intermediate downside target (1820/GCJ), triggering a new multi-week buy signal on the March 8 close…
The 1 – 2 month outlook still calls for the next peak to occur in early-May ’23… reinforced by Silver’s recent peak on Mar 6/7 – perpetuating a 61 – 63-day/~2-month low (Sept 1) – low (Nov 3) – high (Jan 3) – (high; Mar 6/7, ’23) Cycle Progression… and projecting a future high in early-May ‘23.
A high in early-May ‘23 would fulfill a ~4-month low-high-(high) Cycle Progression in Silver and a ~3-month low-high-(high) Cycle Progression in Gold. Gold would also complete successive advances of equal duration (~7 months/~31 weeks, when compared to Aug ’21 – Mar ’22) if it extends its overall advance into early-May ’23.
And that would arrive ~6-months/~180 degrees before a more significant cycle peak in early-Nov ’23 (see March ’23 INSIIDE Track for add’l details)…
Silver has, however, fulfilled almost all of what would be expected from a larger-magnitude ‘2’ (or ‘B’… both have the same characteristics) wave pullback and entered the ideal time for a new 1 – 2 month rally…
The XAU & HUI retested their lows as they completed the ideal time frame for a low – fulfilling a 21 – 23 week high-high-high-high-low-(low) Cycle Progression that helped pinpoint the Sept ’22 low and recurs on Feb 24 – Mar 10, ’23…
Platinum sold off into late-Feb ’23 – when 90/180 /360-degree cycles came into play – fulfilling a ~6-month high-low-(low) Cycle Progression and a 50% retracement in time (18 wks up/9 wks down). In Feb ’23, Platinum plunged to its monthly HLS (extreme downside target for Feb ‘23) at ~905.0/PLJ, where a low was most likely.
That was also near the levels of the Sept & Dec ’21 lows – creating the potential for an Inverted Head and Shoulders pattern on a 1 – 2 year basis. The next multi-month high is likely in early/mid-May ‘23, perpetuating the 18 – 19 week Cycle Progression.”
That was also the time when metals were entering the ‘sweet spot’ of inflationary factors – when inflation was/is still very much alive (just not accelerating upward) even as Bonds & Notes were projecting a major bottom – ideally in March ’23. Even though the Fed could still raise rates one or more times in the coming months, the markets are already turning their focus to the potential for lower interest rates in the coming 6 – 12 months.
That would allow Bonds to decline for ~32 months (July ‘20 into March ‘23) and then rally for ~16 months (March ‘23 into July ‘24; a 50% rebound in time) – the textbook division for a cycle like this.
That could be the ‘sweet spot’ for metals! Why??
When inflation is raging, interest rates are usually rising and that keeps a lid on Gold & Silver prices. In the case of Gold, it has been ‘treading water’ for the past two years – unfolding in what was perceived to be a ~2-year ‘flat correction’ – setting successive highs and then successive lows at similar levels… patiently waiting for interest rate fears to dissipate.
When those interest rate hikes near an end – even as underlying inflation remains in place (and expected to see another move higher in 2024/25), it provides the optimum scenario for advances in Gold & Silver.
When, as was the case in 2022, interest rate hikes are also helping to support the Dollar (another suppressing factor on metals), their reduction/removal has a dual-bullish impact on Gold & Silver.
Gold & Silver entered this period in late-2022 and, if the outlook for Bonds is accurate, could be in this favorable time frame for another year. That is not to say interest rates are the ONLY factor in spurring rallies or declines in metals. Instead, it is to identify a period of time when rates should be more conducive for repeated gains in metals… the proverbial ‘sweet spot’…
Gold & Silver remain on course for an overall rally from early-March into early-May ‘23. That would fulfill a ~3-month low-high-(high) Cycle Progression in Gold and a ~4-month low-high-(high) Cycle Progression in Silver. Gold would also complete successive advances of equal duration (~7 months/~31 weeks, when compared to Aug ’21 – Mar ’22) if it extends its overall advance into early-May ’23…
The XAU & HUI remain strong, further validating their monthly trend signals and the lows set on Mar 6 – 10, ’23 in fulfillment of the 21 – 23 week high-high-high-high-low-(low) Cycle Progression that has governed these indexes for a couple years. On balance, this current rally should stretch into late-April/early-May ‘23.”
Gold & Silver have steadily advanced since fulfilling the 1 – 2 year outlook for lows in Sept ’22 (SI) and Nov/Dec ’22 (GC). At that time, they entered the ideal setup – based on inflationary factors (slowing), interest rates, and the Dollar (peaking) – for the onset of a very bullish 1 – 2 year period in precious metals. Platinum is signaling something similar. 2023/24 holds the potential for some abrupt surprises (in and out of the markets) for precious metals, with multiple advances projected.
The second advance was expected to begin in early-March ‘23, after metals completed ‘2’ or ‘B’ wave pullbacks (following the initial advances), and to last into early-May ’23 (May 3 – 5) when the next intermediate high is most likely. Corresponding signals projected strong rallies in March & April ’23… coinciding with the outlook for bottoming Bonds & Notes, Cryptos and other markets.
The XAU & HUI are similar and projected a multi-month low by/on March 6 – 10 – perpetuating an uncanny ~23-Week Cycle. The monthly trend projects a strong rally to new intra-year highs to follow. Gold triggered a convincing weekly buy signal on March 3, ’23 and then triggered a corroborating daily buy signal on the March 8 close… confirming the outlook for a new surge in March/April ’23.
How High Could Gold & Silver (&XAU) Reach in 2023? Is a New MAJOR Bull Market in store??
Will the Outlook for Bonds (Bottom in ~March ’23) & Interest Rates Concur?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.