gold investment - logo

gold investing

Gold Investment Updates

Add to cart

Gold Investment Updates are weekly gold investment newsletter provided by Przemyslaw Radomski, CFA. They are based on the flagship Gold & Silver Trading Alerts that focus on all the key factors that govern long- and medium-term outlooks for gold, silver, and mining stocks. These comprehensive reports (usually size of a small ebook) ensure that you’re kept up-to-date on important developments that 99%+ of investors are likely to miss.

  • Gold Investment Update - Our Previous Bearish Warning for PM Investors, Confirmed

    May 1, 2020, 9:35 AM

    Silver at $15... perched high, or getting ready for a great dip? How far do the similarity lessons go in the white metal actually - can they be applied to today's situation?

    As far as the SLV ETF is concerned, we also continue to see similarity between both periods: early March and late April.

    In yesterday's analysis, we wrote that the SLV ETF closed Wednesday's session 2 cents above the upper border of its previous price gap, but that the breakout would likely be invalidated because of silver's triangle-vertex-based reversal.

    That's exactly what happened. Silver reversed precisely on the day indicated by the triangle-vertex-based reversal, and it declined not only below the above-mentioned border of the price gap, but it even declined visibly below the rising support line.

    All this happened on relatively strong volume. Interestingly, we saw exactly the same thing in early March. Shortly thereafter silver paused, but then it plunged with vengeance. It seems that we are just ahead of a similar move lower also this time.

    The above chart shows just how well the reversal technique worked.

    Also, let's keep in mind that silver is likely to decline below $9 based on its long-term analogy to 2008 that we've been featuring for months:

    Silver plunged to our initial target level and reversed shortly after doing so. It was for many months that we've been featuring the above silver chart along with the analogy to the 2008 slide. People were laughing at us when we predicted silver below $10.

    Well, the recent low of $11.64 proves that we were not out of our minds after all. Our initial target was reached, and as we had explained earlier today, the entire panic-driven plunge has only begun.

    Those who were laughing the loudest will prefer not to notice that silver reversed its course at a very similar price level at which it had reversed initially in 2008. It was $12.40 back then, but silver started the decline from about 50 cent higher level, so these moves are very similar.

    This means that the key analogy in silver (in addition to the situation being similar to mid-90s) remains intact.

    It also means that silver is very likely to decline AT LEAST to $9. At this point we can't rule out a scenario in which silver drops even to its all-time lows around $4-$5.

    Note: Silver at or slightly below $8 seems most probable at this time.

    Crazy, right? Well, silver was trading at about $19 less than a month ago. These are crazy times, and crazy prices might be quite realistic after all. The worst is yet to come.

    Let's quote what the 2008-now analogy is all about in case of silver.

    There is no meaningful link in case of time, or shape of the price moves, but if we consider the starting and ending points of the price moves that we saw in both cases, the link becomes obvious and very important. And as we explained in the opening part of today's analysis, price patterns tend to repeat themselves to a considerable extent. Sometimes directly, and sometimes proportionately.

    The rallies that led to the 2008 and 2016 tops started at about $14 and we marked them both with orange ellipses. Then both rallies ended at about $21. Then they both declined to about $16. Then they both rallied by about $3. The 2008 top was a bit higher as it started from a bit higher level. And it was from these tops (the mid-2008 top and the early 2017 top) that silver started its final decline.

    In 2008, silver kept on declining until it moved below $9. Right now, silver's medium-term downtrend is still underway. If it's not clear that silver remains in a downtrend, please note that the bottoms that are analogous to bottoms that gold recently reached, are the ones from late 2011 - at about $27. Silver topped close to $20.

    The white metal hasn't completed the decline below $9 yet, and at the same time it didn't move above $19 - $21, which would invalidate the analogy. This means that the decline below $10, perhaps even below $9 is still underway.

    Now, some may say that back in 2008, silver rallied only to about $14 and since now it rallied to about $16, so the situation is now completely different and that the link between both years is broken. But that's simply not true.

    The nominal price levels are just one of the ways that one should look at the analogy - far from being the perfect or most important one.

    Please note that back in 2008, there were two smaller bottoms in silver, and this time we saw just one. The decline before the bottom was sharper, so is it really that surprising that the rebound was sharper as well? Silver ended the 2008 corrective upswing once it moved visibly above the declining orange line and that's exactly what happened recently. It also topped once it reached its 10-week moving average (red line). That's exactly what just happened.

    This MA is at $15.12 and at the moment of writing these words, silver is back below it, trading at $14.88.

    The situations are not perfectly identical in terms of nominal prices, but they remain remarkably similar given how different fundamental reasons are behind these price moves (in reality, what's behind both declines is fear that - itself - doesn't change).

    The technique used for predicting silver price is clearer than the one that we applied for gold, so it seems useful to look not only at the USD Index for signs, but also at the white metal itself. Once silver moves to $8 or below it, it will likely serve as a strong buy sign for gold, regardless of the price at which gold will be trading at that time.

    Also, please note that silver formed a big shooting star candlestick during the previous week, which is a topping sign. The volume was low, but it was not low just during the formation of this candlestick, but it's been low during this month's upswing as well. It's relatively unclear whether the volume is confirming or invalidating the shooting star. Consequently, we view it as a bearish confirmation, and we wouldn't open a position based just on it. However, since it's just one of the factors pointing to much lower silver prices in the next few weeks, we view the very bearish outlook as justified.

    Thank you for reading today's free analysis. The full version of today's analysis includes details of our currently open position as well as supports and targets of the upcoming sizable moves in gold, silver and the miners. It includes not only the final targets, but also the interim ones that could trigger a rebound as early as next week.You might also be interested in our new service - weekly Gold Investment Updates, which we have recently

    introduced, and which we provide at promotional terms. Try them out today.

    Thank you.

    Sincerely,
    Przemyslaw Radomski, CFA
    Editor-in-chief, Gold & Silver Fund Manager

  • Gold Investment Update - Precious Metals, Lockdowns and Reopening

    April 27, 2020, 10:13 AM

    The action in silver is really interesting. Let's check the prospects for volatile white metal, and the relevant historical analogy it offers. Is the major 2008 - 2020 analogy in terms of price moves remains intact? In short, yes.

    Silver Shares Its Two Cents

    Silver plunged to our initial target level and reversed shortly after doing so. It was for many months that we've been featuring the above silver chart along with the analogy to the 2008 slide. People were laughing at us when we forecasted silver below $10.

    Well, the recent low of $11.64 proves that we were not out of our minds after all. Our initial target was reached, and as we had explained earlier today, the entire panic-driven plunge has only begun.

    Those who were laughing the loudest will prefer not to notice that silver reversed its course at a very similar price level at which it had reversed initially in 2008. It was $12.40 back then, but silver started the decline from about 50 cent higher level, so these moves are very similar.

    This means that the key analogy in silver (in addition to the situation being similar to mid-90s) remains intact.

    It also means that silver is very likely to decline AT LEAST to $9. At this point we can't rule out a scenario in which silver drops even to its all-time lows around $4-$5.

    Note: Silver at or slightly below $8 seems most probable at this time.

    Crazy, right? Well, silver was trading at about $19 less than a month ago. These are crazy times, and crazy prices might be quite realistic after all. The worst is yet to come.

    Let's quote what the 2008-now analogy is all about in case of silver.

    There is no meaningful link in case of time, or shape of the price moves, but if we consider the starting and ending points of the price moves that we saw in both cases, the link becomes obvious and very important. And as we explained in the opening part of today's analysis, price patterns tend to repeat themselves to a considerable extent. Sometimes directly, and sometimes proportionately.

    The rallies that led to the 2008 and 2016 tops started at about $14 and we marked them both with orange ellipses. Then both rallies ended at about $21. Then they both declined to about $16. Then they both rallied by about $3. The 2008 top was a bit higher as it started from a bit higher level. And it was from these tops (the mid-2008 top and the early 2017 top) that silver started its final decline.

    In 2008, silver kept on declining until it moved below $9. Right now, silver's medium-term downtrend is still underway. If it's not clear that silver remains in a downtrend, please note that the bottoms that are analogous to bottoms that gold recently reached, are the ones from late 2011 - at about $27. Silver topped close to $20.

    The white metal hasn't completed the decline below $9 yet, and at the same time it didn't move above $19 - $21, which would invalidate the analogy. This means that the decline below $10, perhaps even below $9 is still underway.

    Now, some may say that back in 2008, silver rallied only to about $14 and since now it rallied to about $16, so the situation is now completely different and that the link between both years is broken. But that's simply not true.

    The nominal price levels are just one of the ways that one should look at the analogy - far from being the perfect or most important one.

    Please note that back in 2008, there were two smaller bottoms in silver, and this time we saw just one. The decline before the bottom was sharper, so is it really that surprising that the rebound was sharper as well? Silver ended the 2008 corrective upswing once it moved visibly above the declining orange line and that's exactly what happened recently. It also topped once it reached its 10-week moving average (red line). That's exactly what just happened.

    This MA is at $15.48 and at the moment of writing these words, silver is back below it, trading at $15.35.

    The situations are not perfectly identical in terms of nominal prices, but they remain remarkably similar given how different fundamental reasons are behind these price moves (in reality, what's behind both declines is fear that - itself - doesn't change).

    The technique used for predicting silver price is clearer than the one that we applied for gold, so it seems useful to look not only at the USD Index for signs, but also at the white metal itself. Once silver moves to $8 or below it, it will likely serve as a strong buy sign for gold, regardless of the price at which gold will be trading at that time.

    Also, please note that silver formed a big shooting star candlestick during the previous week, which is a topping sign. The volume was low, but it was not low just during the formation of this candlestick, but it's been low during this month's upswing as well. It's relatively unclear whether the volume is confirming or invalidating the shooting star. Consequently, we view it as a bearish confirmation, and we wouldn't open a position based just on it. However, since it's just one of the factors pointing to much lower silver prices in the next few weeks, we view the very bearish outlook as justified.

    On the short-term note, we see that silver is more or less repeating its early-March performance. The price moves are not identical in terms of the Fibonacci retracement levels, but comparing the size and shape of the initial rallies (blue dashed lines) we get almost identical results. After rallying sharply initially, silver started to do... pretty much nothing. That was the same in early March. It was after a few additional days, when silver's corrective upswing had really ended, and the big slide started.

    If the similarity to the early-March continues, we can expect the decline to start on Wednesday or very close to it. Please note that silver's first few days of the decline were noticeable, but not huge. However, once silver broke below its previous lows, it took only three sessions for the white metal to slide below $12. Let's keep in mind that previously silver started from higher price levels.

    The implications are bearish for the following few weeks and rather neutral for the next few days.

    Thank you for reading today's free analysis. If you'd like to supplement the above with details regarding the details of our current trading positions (and the upcoming ones), or the targets of the upcoming sizable moves in gold, silver and the miners for that matter, we encourage you to subscribe to our Gold & Silver Trading Alerts. You might also be interested in our new service - weekly Gold Investment Updates, which we have recently introduced, and which we provide at promotional terms. Try them out today.

    Thank you.

    Sincerely,
    Przemyslaw Radomski, CFA
    Editor-in-chief, Gold & Silver Fund Manager

  • Gold Investment Update - It's Ready, Steady, Go for the PMs

    April 15, 2020, 10:38 AM

    It's certainly a safe bet to say that gold and the dollar don't move in random ways. That's an understatement as the USD moves exert great influence on the yellow metals' prices, like it or not. The changing strength and direction of their relationship is a telling factor, so it pays off to ask what message it's sending these days.

    On April 6th, we wrote that gold could first rally to or slightly above its 2020 high and decline in a volatile manner shortly thereafter. The former has already taken place, and now it seems that the latter will take place.

    Since the USD Index is such an important piece of the puzzle, let's take a look at its charts.

    More on the USD Index and Gold

    You already saw the most important USD Index chart 2 charts ago - the USDX is after a major, long-term breakout that was confirmed a few times, so it's now in a strong long-term uptrend. Let's keep in mind that it doesn't mean that the situation in the US is perfect - it means that it's better than in other territories - mostly in the EU and Japan. And that does seem to be the case.

    Having said that let's take a look at the above chart. Quoting our previous comments on it appears justified as practically all the long- and medium-term points remain up-to-date.

    The USD Index was previously (for the entire 2019 as well as parts of 2018 and 2020) moving up in a rising trend channel (all medium-term highs were higher than the preceding ones) that formed after the index ended a very sharp rally. This means that the price movement within the rising trend channel was actually a running correction, which was the most bullish type of correction out there.

    If a market declines a lot after rallying, it means that the bears are strong. If it declines a little, it means that bears are only moderately strong. If the price moves sideways instead of declining, it means that the bears are weak. And the USD Index didn't even manage to move sideways. The bears are so weak, and the bulls are so strong that the only thing that the USD Index managed to do despite Fed's very dovish turn and Trump's calls for lower USD, is to still rally, but at a slower pace.

    We previously wrote that the recent temporary breakdown below the rising blue support line was invalidated, and that it was a technical sign that a medium-term bottom was already in.

    The USD Index soared, proving that invalidation of a breakdown was indeed an extremely strong bullish sign.

    Interestingly, that's not the only medium-term running correction that we saw. What's particularly interesting is that this pattern took place between 2012 and 2014 and it was preceded by the same kind of decline and initial rebound as the current running correction.

    The 2010 - 2011 slide was very big and sharp, and it included one big corrective upswing - the same was the case with the 2017 - 2018 decline. They also both took about a year. The initial rebound (late 2011 and mid-2018) was sharp in both cases and then the USD Index started to move back and forth with higher short-term highs and higher short-term lows. In other words, it entered a running correction.

    The blue support lines are based on short-term lows and since these lows were formed at higher levels, the lines are ascending. We recently saw a small breakdown below this line that was just invalidated. And the same thing happened in early 2014. The small breakdown below the rising support line was invalidated.

    Since there were so many similarities between these two cases, the odds are that the follow-up action will also be similar. And back in 2014, we saw the biggest short-term rally of the past 20+ years. Yes, it was bigger even than the 2008 rally. The USD Index soared by about 21 index points from the fakedown low.

    The USDX formed the recent fakedown low at about 96. If it repeated its 2014 performance, it would rally to about 117 in less than a year. Before shrugging it off as impossible, please note that this is based on a real analogy - it already happened in the past.

    In fact, given this month's powerful run-up, it seems that nobody will doubt the possibility of the USD Index soaring much higher. Based on how things are developing right now, it seems that the USD Index might even exceed the 117 level, and go to 120, or even higher levels. The 120 level would be an extremely strong resistance, though.

    Based on what we wrote previously in today's analysis, you already know that big rallies in the USD Index are likely to correspond to big declines in gold. The implications are, therefore, extremely bearish for the precious metals market in the following months.

    On March 23rd, we wrote that the USD Index was ripe for a correction, and that was indeed the case.

    However, a few weeks passed, and the USD Index now appears to be ready for another powerful upswing.

    We saw the first very strong short-term signs of it yesterday. Here's what we wrote:

    Speaking of early March... The USD Index just did something that it also did back then.

    Looking at the 4-hour candlestick chart, we see that the USD Index just formed a reversal and is now testing the previous lows. There were very few 4-hour reversals in the recent days, but when we saw them, big and fast rallies followed. The early-March bottom is particularly similar to the current situation as the USD Index is - just like back then - after a visible decline, and the 4h reversal was followed by a re-test of the intraday low.

    What happened next?

    The USD Index moved below the intraday low of the reversal and then soared back up - exactly as it did in early March. And just like what it did back then, the USDX rallied immediately after the bottom and it did so in a sharp manner, especially right after breaking above the most short-term declining resistance line.

    At the same time, the USD Index invalidated the small breakdown below the April 1st low.

    Once the USD Index soars above the upper declining resistance line (currently at about 99.6) it will be relatively clear that the short-term bottom is already in and another big upswing has just begun.

    That line will be the final short-term confirmation, though. The most important line is the one that the USX is testing right now. It's the one based on the April 6th and April 8th tops. Once the USDX breaks above it, the short-term odds will be on the bulls' side and it will be clearly visible for many traders, not only for those who pay attention to the price pattern analogies and are able to detect the bottoms earlier (such as us). It could be the case that when you read this, the breakout above this line is already confirmed.

    How could the above translate into a gold price prediction?

    The 2008 USD - Precious Metals Lesson

    Please note what triggered the final decline in gold, silver, and mining stocks. It was the continuation of the rally in the USD Index. The first part of the decline in gold took place when the USD Index was rallying, and it soared back up when the USDX corrected.

    Interestingly, the yellow metal ignored the first (late-September) rally in the USD Index and gold topped once the USD Index paused, likely based on the assumption that the USDX uptrend was already over at that time.

    We saw something similar right now. Gold generally ignored USD's early-April upswing. When the USD Index corrected, gold soared, likely based on the assumption that the USDX uptrend was already over.

    Right now, the USD Index seems to have started to take off once again. And this time, gold is reacting to it - just like it did in early October 2008. At the moment of writing these words, the USD Index is up by 0.55%, while gold is down by 1.83% (over $30). This may not seem much, but it's the biggest intraday decline in gold that we saw this month. And there are still a few hours left before the markets open in the US today. Also, silver is down by 3.3% and it just - once again - invalidated the breakout above $16.

    As the USD Index rally unfolds, the precious metals market is likely to slide, just like it did in 2008.

    Thank you for reading today's free analysis. If you'd like to supplement the above with details regarding the details of our current trading positions (and the upcoming ones), or the targets of the upcoming sizable moves in gold, silver and the miners for that matter, we encourage you to subscribe to our Gold & Silver Trading Alerts. You might also be interested in our new service - weekly Gold Investment Updates, which we have recently introduced, and which we provide at promotional terms. Try them out today.

    Thank you.

    Sincerely,
    Przemyslaw Radomski, CFA
    Editor-in-chief, Gold & Silver Fund Manager

Gold Alerts

More

Dear Sunshine Profits,

gold and silver investors
menu subelement hover background