AnalysHandelsvarorGold and Silver Correction Likely Before Macro Catalyst

Gold and Silver Correction Likely Before Macro Catalyst

Bank failures coupled with the anticipation of the Fed pivot pushed Guld to new monthly and quarterly highs, but the breakout move through $2,100/oz has remained elusive.

Multiple failures around $2050/oz and a rebound in the Dollar and bond yields are sending precious metals lower.

Moreover, a small breakout in the stock market likely cements an interim peak in precious metals.

The S&P 500 has broken out from a three-and-a-half-month consolidation to a nine-month high. It could run from 4300 to 4400 or even slightly higher before the recession hits.

A stronger stock market pushes out Fed rate cuts, leading to higher real interest rates in the short term. Furthermore, the US Dollar Index is rebounding. All of these factors could pressure precious metals into summer.

chart 1
chart 1.

In February, we wrote about how Gold should break out when the recession hits. The worst declines in bear markets are associated with the start of recessions.

In the chart below, we mark key lows in Gold (blue lines) and the associated declines in the stock market (yellow). The next slide in the stock market should set the stage for Gold to make its breakout.

Gold has a confluence of strong support around the mid $1800s. It will not retest or break to a new all-time high until the stock market rolls over again. A market downturn is needed for the Fed to start easing.

chart 2
chart 2.

As for silver and the mining stocks, they will outperform Gold in earnest only when Gold surpasses $2100/oz.

Now is the time to research and uncover the best opportunities while they remain cheap. This correction is also the time to reconsider the strong stocks you missed.

I continue to focus on finding high-quality gold and silver juniors with 500% upside potential over the next few years.

Jordan-Roy-Byrne-CMT23
Jordan-Roy-Byrne-CMT23
I’m Jordan Roy-Byrne, CMT, MFTA the editor and publisher of TheDailyGold.com and TheDailyGold Premium, our premium publication which emphasizes market timing and stock selection for precious metals investors. I’m a Chartered Market Technician and Master of Financial Technical Analysis. My Masters Thesis, which earned me the MFTA designation was published in the International Federation of Technical Analysis Journal. I earned a degree in General Studies from the University of Washington with a concentration in International Economic Development. In my spare time I enjoy weightlifting, following sports, National Parks, classic mob movies and traveling with my outdoors enthusiast wife. TheDailyGold I started TheDailyGold.com in 2009 although the genesis was in 2005 when I started a free newsletter covering commodities with an emphasis on Gold & Silver. We offer quite a bit of free content here and can help you whether you are a seasoned investor or this is your first time stumbling upon Gold and the junior mining world. First, go here to obtain a copy of our 2019 Book The Coming New Bull Market in Gold: Why Precious Metals Investments Will Flourish in the 2020s and 2030s. From there, we will also send you our weekly newsletter, which includes our latest content and thoughts on Gold and gold stocks. The book contains all of our best research on Gold and lays out what you can expect from the economy, capital markets and precious metals over the next 10 to 15 years. It is very important to me to educate people and help them profit immensely and avoid losing real wealth, which will deteriorate if you hold US-based assets over the next 10 to 15 years. Next, be sure to subscribe to our YouTube Channel as well as our podcasts: TheDailyGold Podcast and the new, 10-Bagger Podcast. Contact I can be reached at Jordan @ The Daily Gold . com (spaces removed to prevent spam). I try to answer every email but emails from subscribers are paramount. We currently are not interested in any advertising and we do not accept any guest posts or sponsored posts.
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