Almost There
The breakout for gold and especially silver is very close. Gold has been positive for months until this recent expected pullback. Having ticked off all the expected targets up to the 1975 area, I called for a 100-150 dollar pullback. With the 50 day mvg avg now around 1860 that is likely support. A dip down into the area around 1825 is possible but I would not expect much lower, nor staying there for very long. Silver is trickier, it could test the 200 day just above 21, but would probably settle around 21.50.(In reviewing the chart I see silver is at the same level of oversold as it was at it’s Sept. low, even though it is more than $4 higher in price) The point is we got the correction based on the usual FED nonsensical hawkishness, supported by the Biden administration’s continued manufactured job creation numbers that were all from seasonal adjustments. Add in the fact that they are revising CPI higher and most importantly that they are HIDING the COT reports for the last two weeks and you have everything set up for the coming surprise upside explosion in gold and silver. Likely to arrive after the President’s Day holiday in the trading week of February 22-25. (Maybe increased activity in Ukraine as it marks the one year anniversary of the SMOP) It wouldn’t be why a breakout occurs but the markets always find something for a cover story.
FYI. HL, my preferred silver miner releases earnings tomorrow BEFORE the open. Since the bottom in Sept. silver went from a low around $17 to a high just below $25. Over the same timeframe HL went from a low of $3.50 to a high of $6.50. Earnings may not be great and HL has often had disappointing earnings releases but the stock performs with silver and actually tends to lead. If you want to play, take a half position today before the report. After you see what they release, and more importantly, how the stock trades tomorrow one can add that other half position, wait to see if silver strengthens, or cut bait if you don’t like how it acts.
CM – what is your opinion on the impact it would have on PM’s IF the Fed reserve were to increase the Prime Rate by 50 basis points or higher at next meeting??
One would think to do that the inflation rate took off which I don’t see, but lets say they did, it would tank the markets which would be gold(and ultimately silver) friendly. Others think the metals correction has more to go(I don’t) but even those expecting nothing to happen until summer still believe prices will be higher by year end. Stick with the trend (higher) it is your friend.