Gold, Silver, & XAU (& Dollar/Euro) Focused on Aug 17 – 24, ’23… and Beyond!
07-26-23 Silver’s ‘Sweet Spot’ Reinforced by Fed – “Today’s widely-anticipated Fed action and comments reinforced the developing ‘sweet spot’ for Gold & Silver… that unique period of time – within an inflationary cycle – when economic activity and price inflation are still much higher than normal (supporting ‘inflationary’ metals like Silver) BUT the threat of looming and repeated interest rate hikes is finally removed.
The latter stages of that interest rate cycle, as described in late-2022 and early-2023, are also often when the Dollar loses value as the perceived support of repeated future interest rate hikes – which help support its value – begins to wane. That creates a bullish ‘double whammy’ (a highly technical term) for a market like Silver… a carrot and a stick, without the stick.
The removal of negative interest rate influence and the increasing addition of positive Dollar action (dropping) combines to support Silver during that phase of an inflationary cycle. There is also a third factor that is likely to create a ‘triple whammy’ in the coming year(s).
In late-2022, wave action, price indicators, trend factors, fulfilled downside targets, multi-month & multi-year support levels, and other bullish factors corroborated that ‘sweet spot’ analysis and signaled a major low in Silver. It is important to fully understand the potential ramifications of this since they could be profound and somewhat-longer lasting.
In Sept/Oct ’22, INSIIDE Track and the Weekly Re-Lay detailed why and how Gold & Silver were likely bottoming on a multi-year basis – as a brand new Currency War was in its infancy – and poised to enter several different magnitudes of uptrends, including 3 – 6 month surges, likely 6 – 12 month rallies (into late-’23), and potentially 1 – 2 year advances lasting into 2024.
Downside price objectives were being met, monthly & multi-year cycles were bottoming, and the overall wave structure – though dramatically different in the two metals – was showing that both Gold & Silver were poised to set multi-year (divergent) lows in late-2022.
At the time, these publications detailed why, when, and where multi-year bottoms were poised to take hold in Gold & Silver as the US Dollar reached major, 5 – 10 year and 10 – 15-year upside targets and began to peak:
09-29-22 – “The year 2021 completed the latest 40-Year Cycle of Currency Wars and ushered in a new one. Cycles never ‘end’; they just transition to a new phase after completing a previous one. This particular 40-Year Cycle dates back to (at least) the 1200’s in Europe and (at least) the late-1600’s in the Americas.
In each case, it pits the interests of paper/fiat (often debt-backed) currency against hard currency (usually Gold or Silver).
That has timed everything from the rise and inevitable fall of the Continentals (1776 – 1781) to the return to a Gold Standard after a contentious election focused on that topic (1896 – 1901) to the Jamaica Accord (global fiat ‘divorce decree’ from Gold) and subsequent plunge in fiats/surge in metals (1976 – 1980/81)… as well as intervening currency battles in 1816 – 1821, 1856 – 1861 & 1936 – 1941.
They all projected a future battle in 2016 – 2021.
In 2014/2015, INSIIDE Track published articles titled: 2016 – The Golden Year – explaining why Gold should bottom in late-2015, see its first sustainable surge (in many years) in 2016, and ultimately advance into late-2020/early-2021 before a topping process took hold. (insiidetracktrading.com/wp-
The Dollar Index masked that degradation by spiking higher into early-2017 cycle highs and then setting a trading range (over the next 12 months) in which it would trade for 5+ years. It was not until those Gold cycles matured, in late-2020/early-’21, that the Dollar Index was projected to enter a new ~2-year surge and break out of its trading range.
In the midst of this latest 40-Year Cycle of Currency War, a new combatant emerged – cryptocurrency. It began with Bitcoin and quickly evolved to dozens of other ‘coins’. All that set the stage for parabolic advances – first in Gold and then cryptos – in 2020/’21…” [End 9/29/22 excerpt]
Considering how decisive and pivotal this period is (from late-2022 into late-2023, from early-May into early-Nov ’23, and from late-June ’23 into early-Aug ’23), it is necessary to reprint key aspects of this overriding analysis which is why this Alert – and some recent ones – have been expanded to fit that previous analysis. The Oct ’22 INSIIDE Track went on to explain:
09-30-22 – “This is the time period (beginning in Sept ‘22) when Silver has been forecast to become more of a leader and overtake Gold with respect to its advances.
On a multi-year basis, they remain in a wide range of consolidation that began to take hold after Gold fulfilled projections for a multi-year uptrend from late-2015 into late-2020/early-2021.
That was the same time Silver perpetuated its own ~5-year low (2001) – high (2Q ‘06) – high (2Q ‘11) – high (2Q ‘16) – high (2Q ‘21) Cycle Progression.
That fulfilled a diverse array of upside targets, cycle highs and multi-year projections – some that were linked to the culmination of the latest 40-Year Cycle of Currency Wars that has governed the USA – and its European predecessors – for many centuries. As a result, the late-’20 Gold peak was/is expected to hold for (at least) 2 – 3 years…
Silver has had a different structure – originating from its early-’21 peak. It has declined in a fairly clear 3-wave structure (Feb – Sept ‘21 decline, Sept ‘21 – Mar ‘22 rally, Mar – Sept ‘22 decline) – with the initial decline and rebound each containing 3 waves and the subsequent decline possessing 5 (while slightly exceeding the magnitude of the initial decline).
In Elliott Wave terms, that is a classic 3-3-5 corrective (‘a-b-c’) wave… with the ’a’ & ’c’ waves ’tending toward equality’. While I mainly resist diving into the weeds with multiple wave counts, this entire decline (Feb ‘21 – Sept ‘22) could be a larger-degree ‘B’ wave decline of a multi-year, upside ‘A-B-C’ correction, following Silver’s 2011 – 2020 decline.
In other words, if a 1 – 2 year bottom is set near current levels, Silver would likely embark on a new 1 – 2.5-year advance (to be honed later) and ultimately exceed its early-’21 high…
A perfect example is the ~7-Year Cycle illustrated above. That has consistently timed multi-year lows in Gold (Silver in 4Q ‘01) in 4Q of the respective years.
The latest phase projects a low in 4Q ‘22.” [End 9/30/22 excerpt]
Multi-year cycles were bottoming in late-2022 as Silver was signaling a secondary (higher) low and projecting what could be a 2+-year rally. The April 11, ’23 The Bridge – Gold, Silver and Elliott Wave Structure elaborated on that and delved deeper into the likelihood for an accelerated breakout to the upside – at a key (future) point within those new uptrends.
It also revisited the topic of this ‘sweet spot’ that was being entered, particularly in Silver…
04-11-23 – In Sept & Nov ‘22, Silver & Gold completed multi-year corrective phases – ‘a-b-c’ and ‘A-B-C’ declines on two different magnitudes – and fulfilled cycle lows that came into play at that time. That ushered in what were forecast to be 1 – 2 year (or longer) bull markets in those metals…
One of the factors that removed a heavy burden from Gold & Silver was the US Dollar reaching a combination of major, multi-year upside price targets in 3Q/4Q ‘22… the Dollar Index has fulfilled almost all of what has been projected for its 1 – 2 year and 10 – 15 year advance…
At the time, Silver had signaled a major bottom (early-Sept ‘22), Gold was on track for a multi-year bottom in 4Q ‘22 (arrived in Nov ‘22)… The Dollar Index set its highest weekly close in mid-Oct ’22… That removed a psychological ‘weight’ off anti-Dollar financial instruments (metals & cryptos)…
This interplay – between paper, hard, and digital currency – also includes interest rates, which could have a profound impact on Gold & Silver over the next 12 – 18 months. As described in the Sept ‘22 quote, Dollar strength AND rising interest rates were suppressing the price of Gold & Silver… but were unable to force them into an all-out bear market.
Instead, Gold & Silver went through a corrective phase …biding their time as the Dollar completed the majority of its uptrend… and then interest rates did the same. That is why the outlook for Bonds could hold the key…
The Inflationary Delay
Since 3Q ‘20, Bonds have been forecast to plunge into 3Q ‘22 and ultimately into ~March ‘23 – the ideal trend duration for a 4-Year Cycle, like the one that has governed Bonds for several decades.
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…
So what does that have to do with Gold & Silver?
…When inflation is raging, interest rates are usually rising and that keeps a lid on Gold prices. However, when those interest rate hikes near an end – even as underlying inflation remains in place (though pulling back from its peak), it provides the optimum scenario for advances in Gold & Silver.
When, as was the case in 2022, interest rate hikes are helping to support the Dollar, their 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 a similar 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 favorable for repeated gains in metals.” [End 4/11/23 excerpt]
Sometimes, analysis is worthy of being repeated multiple times. This is one of those times and today’s Fed action could spur the next phase of this seismic currency shift…”
Gold & Silver remain in a corrective phase since fulfilling projections for multi-month peaks on May 3 – 5, ’23. They have repeatedly been forecast to set their next multi-month low in the second half of Aug ’23 (watch August 17 – 24), when a myriad of weekly & monthly cycle lows converge and usher in a unique period of time – in the markets and geopolitically. The outlook for late-August – early-Nov ’23 is becoming more clear and could produce surprising results… in and out of the markets!
All of this action, since late-2022, is powerfully validating the onset of a new 40-Year Cycle of Currency War in which Gold & Silver possess unique potential with the Dollar Index already fulfilling multi-year upside targets and signaling that a major top is in the making! The Dollar is projected to set a future peak on Aug 14 – 25 while Gold & Silver are likely setting multi-month lows.
The XAU & HUI are similar and projected to set decisive lows surrounding mid-Aug ’23, ideally on Aug 17 – 21, ’23. The XAU possesses the most consistent and uncanny weekly cycle – a 23-week high (Jun ’21) – high (Nov ’21) – high (Apr 18 – 22, ’22) – low (Sept 26 – 30, ’22) – low (Mar 6 – 10, ’23) – (low; Aug 14 – 21, ’23) Cycle Progression that portends a multi-month bottom on Aug 14 – 21, ’23 (greatest synergy of cycles on Aug 17/18, ’23).
Where are Metals Likely to Bottom on August 17 – 24, ’23?
Is an Upside Breakout Likely Before Early-Nov ‘23??
Will the Dollar Index Set a Pivotal Peak on Aug 14 – 25, ‘23?
Refer to the April 11, 2023 special issue of The Bridge – Gold, Silver and Elliott Wave Structure – and subsequent reports – for expanded analysis and charts.
Refer to latest Weekly Re-Lay & INSIIDE Track publications for additional details and/or related trading strategies.