After 32 years of weather forecasting, I’ve come to the conclusion that it’s about 75% Science and 25% Art. Once you have your forecast, it’s then completely useless unless you can communicate it effectively, so that people understand it in the way you intend, and take the actions that you would like. I’ve worked in the field of civilian and military forecasting, and knowing your audience is key. In this example, one understands technical jargon and the other doesn’t. Even so, a fast jet pilot, actually isn’t interested in the weather forecast per se, all he or she wants to know is whether or not they can safely complete their mission, given the prevailing weather. Go or no-go, effectively.

Back in the day, our computer would churn out a crude forecast, which the human forecaster would consider, adjust and issue. Today, things are vastly different, we use some of the most powerful supercomputers in the world to model the global atmospheric interactions in three-dimensions, at ever increasing levels of detail. The computer then produces dozens of forecasts. Dozens of possible future weather patterns. We do this in the UK, and they do it in the US, Japan, Germany, France, etc etc. Every 6 hours, (Every hour in the near future), forecasts are produced for the entire planet going many days into the future. Where does that leave us ? Well, this is where you need to consider predictability. Chaos if you like. Sometimes the atmosphere across the Atlantic Ocean  and the UK is in a ‘calm’ balanced state, where we have a good level of predictability. All of our predictions, and those which are done by computer models in other countries are saying the same thing. For example, at the moment, they are all saying that much of the country will be hotter than normal next week, with temperatures in the range 28-35 Celsius (UK Summer average is 20-23 for most areas). On other occasions, there are a range of predictions, all different. That’s where we have to examine what it is that’s causing the differences, and make a judgement call, based on evidence to suggest which is the MOST LIKELY outcome. It’s important to bear in mind that just because Outcome A has a 90% probability and outcome B has a 10% probability, it doesn’t mean outcome A will happen. The favourite in a horse race doesn’t always win…

All of this guides my approach to PM market analysis. I gather ‘evidence’ and weigh the odds. At periodic intervals I’ll remind the reader where the support level for my ‘forecast’ is. At the moment it’s in the region of $1300, because my conceptual model is based around the ‘golden bowl’ formation guiding us towards $1600, before we consolidate and make a break for possible new highs (the timing of which will help me get some sort of idea what kind of bull market targets might be possible).

Here are some pieces of evidence…

#1 – Gold breaking to new all time highs globally

#2 – CHF/USD looking bullish

#3 – JPY/USD looking long-term bullish

#4 – GSR coming off all time highs

#5 – DXY hasn’t broken my ‘domed’ resistance area

#7 – ‘Golden Bowl’ basing formation is doing its job like last time

#8 – Silver is just starting to outperform

#9 – Miners are starting to move

#10 – Donald Trump is actively seeking to suppress the Dollar

#11 – Interest rates are not going higher – as I’ve been saying for years, they are unable to ‘normalise’ EVER due to the incredible debt burdon. Lord only knows what form of monetary saucery will     be invented this time around, but none of it will be good for the long term health of economy. This is the case on a global scale – that’s why country after country is breaking to new all time highs.

 

This is the financial equivalent of a perfect storm. When it hits though, things will become a whole lot less predictable, and I hope at least some folks will have been paying attention to the forecasts and warnings (I don’t necessarily mean from me, I just mean that I hope some are able to protect themselves from the worst of the effects by taking effective action).

This is quite likely to happen slowly at first, then very quickly. In the meantime, expect plenty of pullbacks and consolidations as Gold and Silver begin to wake from their long slumber.