Why Gold & Silver Should Surge into Dec. 31 – Jan. 4! Could Stock Market Low (Dec. 24 – 28) Corroborate?
Why Gold & Silver Should Surge into Dec. 31 – Jan. 4! Could Stock Market Low (Dec. 24 – 28) Corroborate?
12/22/18 Weekly Re-Lay: “Gold & Silver remain positive, reinforcing the multi-week buy signal triggered in Gold (around 1217.0/GCG) and the multi-month buy signal triggered in Silver, both in late-Nov.
Gold has been steadily gaining ground for almost four months and could still see an accelerated spike higher in the coming week(s). Gold closed above the descending weekly 21 MAC last week and then turned that multi-month indicator positive this past week.
On a daily basis, it has done the opposite of what several stock indexes recently did with respect to their daily & weekly 21 MACs…
In the case of those equity indexes (NQH, ESH, etc.), they dropped below their daily & weekly 21 MACs and then bounced twice – testing but not closing back inside those channels. Shortly after, they accelerated to the downside.
In the case of Gold, it rallied above its daily 21 MACs and then pulled back twice – testing but not closing back inside that channel. As long as that remains the case (and Gold stays above its daily 21 High MAC), it could still accelerate further to the upside.
Based on weekly & monthly extremes (LHR), Gold could still surge to 1284 – 1290.0/GCG in December, part of the expected 1 – 2 week rally from Dec. 14 into late-Dec.
A 6 – 7 week low-low-low-low-(high) Cycle Progression projects the next 2 – 3 week high for Dec. 24 – Jan. 4 while a 10-week low-high-(high) Cycle Progression focuses on Dec. 31 – Jan. 4…
[NOTE: It is a valuable reminder to highlight when Gold & the Dollar act like they have the past three months… since it is far more common than many traders want to acknowledge.
On Sept. 21, the Dollar set a multi-month low and has gained 3.5% since then, steadily rallying from late-Sept. into Dec. 14 – 21. At the SAME time, Gold set a multi-month low on Sept. 27 and has rallied 5.7% since then, steadily rallying from late-Sept. into Dec. 14 – 21.
Both have rallied for ~3 months, part of slightly larger 4 – 5 month advances in both Gold and the US Dollar. The two do NOT have to move in opposition, and often do not.]
One additional observation with regard to Silver…
Gold & Silver have this ongoing dichotomy in which they often rally together, on balance, while seriously diverging during their intra-week or intra-month moves. One thing that reveals is that they are still in various forms of congestion. In an all-out uptrend (or downtrend), their moves would be in much closer sync.
Another thing it reveals is that different factors are influencing them. While both are showing signs of recovery, in what is expected to be a new 6 – 12 month and possible 1 – 2 year uptrend (on balance), they are more strongly impacted by competing factors. When the economy is looking better and trade stresses are lessening, Silver rallies stronger on its industrial component (often with Copper doing the same).
In contrast, Gold is experiencing its best moves when it is viewed as a ‘safe haven’ vehicle, during sharp equity market declines (that sometimes weigh on Silver), and when the Dollar sells off. Recently, Silver has languished as Gold has continued to gain.
However, that could shift a bit in the next two weeks – with Silver showing signs it could see a decent runup into Jan. 2 – 4…
[That could also be showing that stocks are nearing the culmination of their latest declines, in sync with a 14-week high (March 5 – 9) – high (June 11 – 15) – high (Sept. 17 – 21) – low (Dec. 24 – 28) and a corresponding 7-week high (Sept. 17 – 21) – high (Nov. 5 – 9) – low (Dec. 24 – 28) Cycle Progression in the S+P 500. That is reinforced by a 16 trading day high (Oct. 17) – high (Nov. 8) – high (Dec. 3) – low = Dec. 27.]
From a technical perspective, Silver has been stuck between 14.00 – 15.00/SI for over four months (since mid-Aug.). It has traded sideways as Gold has steadily rallied during that ~4-month period.
If/when Silver can give a daily close above 15.06/SIH, it would signal a breakout of that range and would likely trigger a quick, accelerated surge to ~16.00/SIH… and potentially higher…
Gold & Silver have moved higher since pulling back into Dec. 14, at which point Gold tested and held its daily & weekly 21 High MACs – a pivotal test of support that was projected to spur an immediate new, sharp 3 – 5 day surge. Gold quickly rallied almost $30.00/oz from that test – taking it to its highest level in over five months.
The Dec. 14 low also allowed Silver to spike lower into the latest phase of a 10 – 11 trading day high (10/02) – high (10/16) – low (10/31) – low (11/14) – low (11/30/18) – low (12/14 – 12/17/18) Cycle Progression – a cycle that now projects a likely rally into Jan. 2 (+ or – 1 trading day).
1 – 4 week traders could be long Feb. Comex Gold futures from 1218.3 down to 1216.8/GCG and holding these long positions w/avg. open gains of about $4,000/contract. Move sell stops to 1239.1/GCG. Exit 1/2 of these positions if/when Gold hits [reserved for subscribers]. TRADING INVOLVES SUBSTANTIAL RISK! .
The XAU nearly made it to 73.00 while fulfilling the potential for an initial high this past week – completing successive rallies of equal duration (~5 weeks each). It came within a half point of its monthly extreme upside target (72.66/XAU) while fulfilling these upside wave and cycle objectives.
It also came within a few ticks of its target for an equal-magnitude ‘c’ wave advance (‘a’ wave was in Sept. – Oct.) at 72.40/XAU. And, it fulfilled the potential for its 10th 2 – 4 day surge (in the past couple months) of ~4.00 – 7.50 points. It surged 4.89/XAU in 3 days.
If the XAU works its way back toward the recent high over the next 1 – 2 weeks, perhaps spiking up to 72.40 – 72.66, it would be in the ideal situation to then pull back to a higher low on Jan. 14 – 18, the next phase of a ~9-week/~60-degree high-low-low-(low) Cycle Progression…
1 – 4 week traders could have entered long positions in XAU related vehicles (options, GDX, gold stocks, etc.) when the XAU was trading at 65.30 down to 62.90. Risk/exit those positions on [reserved for subscribers]. TRADING INVOLVES SUBSTANTIAL RISK!
Gold & Silver are reinforcing forecasts for new surges into early-Jan. while the XAU is validating projections for a 2 – 4 week peak in mid-Dec. Gold remains on track to exceed 1290.0/GCG as part of this advance while Silver is increasing the potential for a surge toward 16.00/SI. Could the overall stock market bottom (Dec. 26 or 27) and then rally in sync with Silver? What would that mean for 2019?
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.