Rates Cuts Coming, What’s Next For Precious Metals? – Commodity Piece

Outlook For Gold And Silver Miners

Rate cuts are coming tomorrow and currently, the market is pricing in a 63% chance of a 50 bps cut. Moreover, a lot of investors expect Gold prices to skyrocket following tomorrow’s cut. But, the technical picture doesn’t fully support such a view in the short-term.

That’s exactly what we’ll look at in this article, along with expectations for Silver. And don’t worry, we do remember the promise we made you in the last article (found here) regarding covering Gold and Silver Miners. That’s also going to be covered in this article. Let’s dive in!

Gold Technical Analysis

In the recent move up, Gold has finally hit our (and the inverse head and shoulders) target of $2575. This is a number we’ve been eyeing ever since the breakout in March 2024 when Gold was still $2100.

However, while getting to the $2575 target level, Gold has put in 2 drives of bearish RSI divergence. This makes the price vulnerable, if/when the bearish divergences confirm.

The trigger for such a confirmation (for us) would be a daily close below $2525, which also coincides with the daily 21-EMA.

From a big picture view, Gold is nearing a major resistance line. This line dates back to 1980 and currently sits around the $2675 level, which will be a key resistance to monitor. It’ll be quite tricky to break above it in the first attempt, so we do expect a pullback IF Gold tags this level following the rate cut.

Remember, we’re still long-term bulls on Gold, but in the near-term the risk-reward on Gold is not attractive enough to us. So, we’re flipping neutral with a slight bearish bias (if Gold breaks below the daily 21-EMA at $2525), until the risk-reward becomes more attractive

Silver Technical Analysis

Silver, on the other hand, reached around the minor support level around $27.57 in the recent pullback. This was a good buying level that we had outlined in our previous article (found here).

We had also mentioned that a key factor we’re looking for is the reclaim of the $28.84 support level – and that’s now happened! We’re not ruling out another test of the $28.84 level to confirm it as support, but this level now has the confluence of the daily 21 and 55-EMAs, which should strength this support level.

On the upside, we’re still eyeing the $35.11 resistance level as our first upside target. We’ll unveil our next target as soon as our first target gets hit and based on how the technicals, intermarket, Macro, and our proprietary Cycle Forecasts are looking at that point.

Silver/Gold Ratio

Between Gold and Silver, the latter (Silver) is a significantly more attractive bet, in our opinion. The Silver/Gold ratio has just put in a double bottom + broken above the downtrend line + reclaimed the daily 9, 21 and 55-EMAs – all very bullish signs for the ratio to continue higher (Silver to outperform Gold).

Our bet between the 2 precious metals is very clear after looking at the chart of the Silver/Gold ratio – Silver is our pick!

Gold Miners ($GDX)

Now that we have looked at spot Gold and Silver, let’s turn our attention to the Miners.

In our last Gold and Silver Miner update (found here), we had told our Paid Members that $GDX has already put in a weekly bearish RSI divergence, but there might be fuel for one more push up into the $39.93 level. Below is a screenshot of our exact words:

A few weeks later and here we are with exactly that scenario playing out. $GDX price indeed did have fuel for one more leg up into the $39.93 resistance level, while forming another drive of bearish RSI divergence on the daily and weekly time frame.

Our members caught the entire move from $32.77 support level all the way to $39.93 resistance level!

So, what’s next for $GDX and how do we trade it? That’s exactly what we’ll cover in the Premium Section next.

We’ll also analyze Silver Miners ($SIL) and Junior Silver Miners ($SILJ). Lastly, we’ll take a look at what our proprietary Cycle Forecasts have to say for Gold and Silver, so that our members can be on the right side of the incoming September price action.

Before we dive into $GDX, here is a quick breakdown of our member tiers and their benefits. If you’re serious about the markets, consider joining our Founding Member tier and join our Discord server for real-time market analysis and Trade Setups.

So, getting back to how to play $GDX from here: