Clearly, we have put in an intermediate cycle low in gold.\u00a0 A couple of months ago, I speculated that silver could be setting up like 2010-11, and so far that analogy has held.\u00a0 However, silver was at the end of its bull run back then, while it is just at the beginning this time, so we will see if the analogy sticks.<\/p>\n
Another possible drag is how far gold and silver are above their 50 and 100 WMAs.\u00a0 At some point, we will absolutely get a large and long sideways consolidation (12-18 months).\u00a0 The question is whether such a consolidation has already started.<\/p>\n
I believe Rambus has noted that impulsive moves tend to last 1 year, and so, if you consider the move off of the March lows an impulsive move, we have a few more months during which potentially huge gains could still be made.\u00a0 However, I think there is a legitimate argument that the impulsive move in the metals and miners actually began in July 2019, which means it should have ended July 2020, which is more or less exactly when gold and the miners topped out recently.<\/p>\n
The current gold intermediate cycle began on September 24th.\u00a0 So we have already chewed up a good amount of time of this cycle merely going sideways (one entire daily cycle).\u00a0 This is why I have placed so much emphasis on the performance of this current, second daily cycle.\u00a0 It needs to be explosive.\u00a0 I am hoping that the August highs will be taken out next week.\u00a0 The longer we dilly-dally and back and fill, the less time there will be to advance.\u00a0 The peak of this intermediate cycle will almost certainly come on the third daily cycle, and if each daily cycle is approximately 30-40 trading days from trough to trough, we don’t have all that much time left (2-2.5 months maybe?).\u00a0 So the daily price action needs to be powerful if we are to really blow away the August highs.<\/p>\n
This is all to say that it is possible gold and silver have already entered into long term consolidations.\u00a0 It is absolutely possible that we can still make marginally higher highs this IC under this scenario, and the rate of ascent may just slow down dramatically over the next 12 months allowing the long term MAs to catch up.\u00a0 A lot will depend on how powerful this second daily cycle is.<\/p>\n
To be honest, I will be disappointed today if the HUI closes red.\u00a0 However, I probably put way too much importance on day to day moves (and my terrible short term calls reflect that) .\u00a0 Nevertheless, every day that isn’t green is one fewer day that we have left in the cycle.<\/p>\n
(also the fact that USD has continued to tank today, yet gold is barely positive so far, is pretty disappointing.)<\/p>\n","protected":false},"excerpt":{"rendered":"
Clearly, we have put in an intermediate cycle low in gold.\u00a0 A couple of months ago, I speculated that silver could be setting up like 2010-11, and so far that analogy has held.\u00a0 However, silver was at the end of … Continue reading