Gold And Silver Are Back – Commodity Piece
Technical Picture Looking Good
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In our previous Gold and Silver article (found here), we had mentioned the technicals for Gold and Silver were reset. Our bias was on Gold holding the $2270 support level and Silver holding the $28.84 support level. That continues to hold accurate as Gold and Silver have respected their respective support levels. Let’s take a look at the updated picture for Gold, Silver and their respective miners. Please note that the prices since the time of writing have gone up slightly following the labor market report, but the analysis still stands.
Gold Technical Picture
Gold continues to range between $2270 and $2435 (orange box in the chart below). A break in either direction would be the signal for the next move. However, recently Gold reclaimed its 9, 21 and 55-daily EMAs, with all 3 are sloping upwards – a bullish development. Also, the daily RSI reset after reaching as low as 43.20 and the MACD has freshly had a bullish cross following a reset.
This confluence looks extremely promising for Gold bulls like us. This type of momentum is usually good enough to break a range, but until there’s confirmation of that with a close above $2435, we’ll have to keep patience. If Gold does break to the upside of this range, then the next level we’re eyeing is $2575, which is the inverse head and shoulders target.
Silver Technical Picture
Similar to Gold, Silver has also reclaimed the 9, 21 and 55 EMAs along with a reset RSI that reached as low as 44.17 and a fresh bullish MACD cross following a reset. Silver also backtested its previous local top as support, which was the $28.84 level, thus confirming it as good support. In the next move up, we’re eyeing the $35.11 resistance level.
Silver/Gold Ratio
We had also anticipated that Silver/Gold ratio would have a pullback after a break above the downtrend line. That pullback did come and find support at the 55-day EMA. Now Silver/Gold ratio has reclaimed the 9 and 21-daily EMAs, suggesting that Silver is likely to outperform Gold once again. Momentum (MACD) has also crossed bullish, providing further evidence to this thesis. In a potential scenario where Gold hits our target of $2575 (+9% move) and simultaneously, Silver hits our target of $35.11 (+15% move), then Silver would outperform Gold.
Intermarket Analysis – USD
A key development has been the rejection of USD ($DXY) from its downtrend line and a breakdown below the range high level of 105.628. This is a very promising development for Silver especially, given the strong negative correlation between USD and Silver.
In the next section for our Paid Members, we’re going to take a look at another intermarket dynamic that gives a key insight into the direction of USD from here. We’ll then take a look at Gold’s Cycle Forecast using our proprietary Forecasts to get a sense of direction for July. Next, we’ll cover Gold Miners, Silver Miners and Junior Silver Miners to maximize profits. It’s time to Make Money!
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