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If you're interested in gold trading or silver trading and would like to see how we apply our gold trading tips in practice, you've come to the right place. The Gold & Silver Trading Alerts are the daily alert service provided by Przemyslaw Radomski, CFA that deals directly with the latest developments on the precious metals market. The situation is analyzed from long-, medium-, and short-term perspectives and topics covered go well beyond the world of precious metals themselves, ranging from the analysis of currencies, stocks, ratios, as well as using proprietary trading tools. Subscribers also receive intra-day follow-ups in case the market situation requires it. 1-2 alerts per week are posted also in our Articles section, so you can review these real-time samples before you subscribe.

Whether you already subscribed or not, we encourage you to find out how to make the most of our alerts and read our replies to the most common alert-and-gold-trading-related-questions.

  • Precious Metals: All It Takes Is a Bearish Spark

    November 20, 2020, 9:18 AM

    Thanksgiving is fast approaching, coronavirus cases are surging and investor excitement around new vaccines is waning as it will take well into 2021 to administer them. The precious metals just don’t have enough steam to keep rolling into December without declining further. Not even slight upswings in the stock market or declines in the U.S. Dollar Index are enough to boost the PMs.

    Today’s analysis is going to be very brief, since during yesterday’s session we simply saw a repeat of the same bearish indications, on which I had already commented a few times. Practically everything that I have written yesterday (Nov 19th) remains up-to-date.

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    Despite its early gains, the U.S. Dollar Index ended yesterday’s session slightly lower. If gold wanted to rally from here, it would have done exactly that. What did it do? It declined, and the same went for silver and mining stocks.

    The miners could have rallied based on the small daily upswing in the general stock market, but they didn’t.

    The above, plus multiple other reasons that I outlined throughout the week suggest that the precious metals sector is about to slide. All it takes is a bearish spark. And based on the broad bottom in the USD Index (and the fact that the sentiment for it is extremely bearish right now), it seems that the PMs are going to get it sooner or later.

    Based on the analysis of the current seasonal tendencies, it seems that we won’t have to wait for long either. Gold tends to slide around Thanksgiving, and while a decline usually takes place shortly thereafter, we can’t rule one out beforehand.

    If we were to pick one specific scenario, we’d say that the big slide will start immediately after or shortly after Thanksgiving, but given the likely prospect of that happening earlier, we don’t suggest adjusting the current short positions anyway.

    As always, we’ll keep our subscribers updated.

    Letters to the Editor

    Q: In your summary of your Gold alert you state that when the price of Gold falls below $1700 it will rebound. It’s not clear to me if that should be the final bottom or after a rebound the final bottom will follow in 1-6 weeks?

    Also, do you see an approximate bottom for silver?

    A: It seems most likely that this would be the final bottom. I wouldn’t rule out a bigger slide, say to $1,600 or even $1,500 during the volatile decline (remember, gold just declined about $100 on Nov 9, so it’s definitely capable of moving in a volatile manner), but I think that once this bottom is in, a new powerful bull market will start.

    Again, it is not the price level per se that will be most important. The key thing will be to see gold being able to recover (and perhaps rally) despite a continuation of the rally in the USD Index – just like what we saw during the March 2020 bottom.

    As far as silver is concerned, the downside target is even less clear. It could bottom between $11 and $19, which is an extremely wide target area. If the general stock market plunges, the $15 and below becomes likely. If the general stock market holds up strongly, the $19 and its proximity become the more likely target. Either way, once miners show strength relative to gold and gold shows strength relative to the USD Index, we’ll likely have a tremendous buying opportunity in gold, silver, and mining stocks, regardless of where silver is going to trade. For now, we see exactly the opposite, and – in my opinion – the great trading opportunity is on the short side.

    The price targets for silver should become clearer once we move closer to them and we’ll keep our subscribers updated.

    Thank you for reading our free analysis today. Please note that the following is just a small fraction of the full analyses that our subscribers enjoy on a regular basis. They include multiple premium details such as the interim target for gold that could be reached in the next few weeks. We invite you to subscribe now and read today’s issue right away.

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

  • Miners: A Bearish Recipe

    November 19, 2020, 9:57 AM

    Available to premium subscribers only.

  • Miners Facing a Long Slide Ahead

    November 18, 2020, 9:44 AM

    Despite a recent decline in the U.S. Dollar Index and small jumps and rallies aside, miners have not moved upwards, defying the usual logic that as the USD Index moves down, precious metals move up. Bearish headwinds for the coming weeks remain strong, a harbinger of a longer slide.

    In yesterday’s analysis, I told you about the bearish clues coming from the relative performance of miners vs. gold and stocks, and gold vs. the USD Index. In today’s analysis, I’m going to tell you that we saw even more of those signs, which strengthened the bearish implications of the previous ones. This in turn adds to the strength of the other – more profound – bearish factors such as the broad bottom in the USD Index.

    Let’s start today’s analysis by saying that miners have just closed at the second lowest daily close since early July.

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    This fact alone should make one question the validity of any bullish argument for the short term. Sure, gold, silver, and mining stocks have explosive potential in the following years. The world is likely to try an attempt to inflate its trouble away and gold is likely to greatly benefit from it along with the rest of the precious metals sector. But in the short term, markets can get ahead of themselves, just like they did in August. They then have to correct before rallying once again.

    And if during these times they get a powerful bearish boost, for instance from a rallying USD Index, the corrective downswing could be profound.

    One more detail about the miners – please note that it’s the first time when the GDX ETF declined once again without a meaningful rally after bottoming near the $37 level. Both previous bottoms: the one that we saw in September and the other in late October, were followed by rallies above $40. This time, the rally was tiny – and it was such even though the USD Index declined and the general stock market moved higher in the last several days.

    The short-term indications that I’ve been commenting on are pointing to the bigger decline having already started, but also being relatively far from over. In fact, based on miners’ weak performance it seems that they just can’t wait to slide further.

    Please note that yesterday was yet another day when miners moved higher initially only to decline during the day.

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    The miners’ daily decline is particularly bearish given no major decline in stocks (just a tiny move lower) and a move lower in the USD Index. The latter “should have” made gold, silver, and miners increase in value. Instead, we saw declines.

    Taking in the last several days, silver is stronger than gold while miners are weaker than gold. As I discussed in my previous analyses, that’s exactly what tends to take place right before bigger declines, so the implications are bearish.

    Thank you for reading our free analysis today. Please note that the following is just a small fraction of the full analyses that our subscribers enjoy on a regular basis. They include multiple premium details such as the interim target for gold that could be reached in the next few weeks. We invite you to subscribe now and read today’s issue right away.

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

  • Golden Clues and Thanksgiving Patterns

    November 17, 2020, 9:43 AM

    Just as with crude oil, the latest Covid-19 vaccine news is causing gold to teeter-totter in small and indecisive daily price swings. Almost nothing changed on the precious metals market and related markets yesterday (Nov 16th), but the key word here is “almost”. There were small changes which can act as clues - bearish clues.

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    First, gold and silver did practically nothing, despite a slightly lower close in the USD Index, which is bearish. Precious metals should have moved higher given the above, and they failed to do so.

    Second is the performance of mining stocks. Miners ended yesterday’s session lower despite nothing in both gold and silver, and a higher close in the general stock market. Given the above, miners “should have” done nothing or moved somewhat higher.

    Miners did move higher, but only initially. They then reversed and ended the session lower. This tells us that miners don’t really want to move higher. Together with the small but still bearish indication from the USD-PMs link, this means that the implications of yesterday’s session are bearish for the near term.

    Besides, that’s the third day in a row when miners started the session higher, only to disappoint and decline during the day.

    Before summarizing, we would like to discuss one specific thing: gold’s performance around Thanksgiving.

    Gold’s Performance around Thanksgiving

    Thanksgiving is on the fourth Thursday of each November, which means that the holiday always falls between November 22 and 28. What’s usually happening to the price of gold before and after this period? Let’s check gold’s seasonality for Q4.

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    During this period, gold is usually just before forming a short-term top and starting the biggest decline within the final quarter of the year.

    Please note that the accuracy measure as to when the top is likely to be is relatively low, but soars right before gold’s plunge. This means that while it’s not that clear when gold is likely to top, it’s quite probable that we are going to see some kind of important top regardless of when exactly that takes place. Could it be slightly ahead of Thanksgiving? Yes. Could it be slightly after it? That’s possible as well.

    But this year is not like other years, and I don’t mean the pandemic. This year, particularly this November, is special because of the U.S. presidential elections. Therefore, instead of taking into account the average of the previous periods around all recent Thanksgivings, one should focus on the Thanksgivings which were concurrent with presidential elections.

    Gold and Thanksgiving during the Presidential Election Years

    Let’s examine the last four cases, when gold was already after the 1999-2000 bottom and within its secular bull market.

    Starting with the most recent case:

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    Back in 2016, the decline simply continued after Thanksgiving, and gold bottomed in the second half of December.

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    Four years earlier, in 2012, gold topped right after Thanksgiving and – just like in 2016 – it bottomed in the second half of December.

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    In 2008, gold topped right before Thanksgiving and it bottomed in the first half of December.

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    Finally, in 2004, gold topped shortly after Thanksgiving, and it formed an initial bottom in the first half of December. However, it then declined once again, further reaching bottom in January and February 2005 (two separate bottoms).

    Consequently, Thanksgiving during the U.S. presidential election year had a bearish follow-up for gold in practically all four cases. Sometimes it was a bit early and at other times a bit late, but overall, it seems that one should be prepared for declines in the yellow metal during the final days of November and early part of December.

    This pattern fits in line with my other thoughts on the gold market. As the USD Index appears to have ended forming its broad bottom pattern, it’s likely to rally, causing gold to slide. At some point gold is likely to stop responding to the dollar’s bearish indications, and based on the above analysis, we expect this might take place in December.

    Thank you for reading our free analysis today. Please note that the following is just a small fraction of the full analyses that our subscribers enjoy on a regular basis. They include multiple premium details such as the interim target for gold that could be reached in the next few weeks. We invite you to subscribe now and read today’s issue right away.

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

  • Gold’s Decline is Written in the Charts

    November 16, 2020, 11:00 AM

    If history is any indicator, then patterns tend to repeat themselves and gold is no exception. The patterns emerging now are retracing events which followed in the wake of the 2016 presidential elections. As it’s taking a breather, bearish signs continue to point at gold being poised for a decline.

    Overall, as the outlook remains bullish for the USD Index, it remains bearish for the precious metals sector. This is particularly the case if we take into account that recently, the Gold Miners Bullish Percent Index ($BPGDM) showed the highest possible overbought reading.

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    The excessive bullishness was present at the 2016 top as well and it didn’t cause the situation to be any less bearish in reality. All markets periodically get ahead of themselves regardless of how bullish the long-term outlook really is. Then, they correct. If the upswing was significant, the correction is also quite often significant.

    Please note that back in 2016, there was an additional quick upswing before the slide and this additional upswing had caused the Gold Miners Bullish Percent Index to move up once again for a few days. It then declined once again. We saw something similar also this time. In this case, the move up took the index once again to the 100 level, while in 2016 this wasn’t the case. But still, the similarity remains present.

    Back in 2016, when we saw this phenomenon, it was already after the top, and right before the big decline. Given the situation in the USD Index, it seems that we’re seeing the same thing also this time.

    Please note that back in 2016, after the top, the buying opportunity didn’t present itself until the Gold Miners Bullish Percent Index was below 10. Currently, it’s above 70, so it seems that miners have a long way to go before they bottom (perhaps a few months – in analogy to how gold declined in 2016).

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    On Thursday (Nov 12th) and Friday (Nov 13th) of last week, miners moved and closed higher, but it’s important to note that their upswing was tiny and not accompanied by strong volume. In other words, it has all the characteristics of the breather that’s going to be followed by another move in the direction in which the market had been moving previously. The previous move was down, so the implications are bearish.

    The intraday nature of Friday’s and Thursday’s moves is also quite informative. In both cases miners moved higher – just as gold did – but then they declined, erasing large part of the preceding gains before the end of the session. That’s yet another clue confirming the counter-trend nature of the recent upswing in the miners.

    It seems that in the previous weeks, miners once again rallied in the manner that is similar to other sessions that we marked with blue ellipses on the chart.

    In particular, what we saw in mid-September appears similar to what we see right now. Back then, the GDX ETF was also after a small breakout above its short-term, blue support line and the 50-day moving average. A relatively sharp short-term decline followed at that time, and the same seems likely also this time.

    Also, let’s not forget that the GDX ETF has recently invalidated the breakout above the 61.8% Fibonacci retracement based on the 2011 – 2016 decline.

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    When GDX approached its 38.2% Fibonacci retracement, it declined sharply – it was right after the 2016 top. Are we seeing the 2020 top right now? This is quite possible – PMs are likely to decline after the sharp upswing, and since there is only less than two months left before the year ends, it might be the case that they move north of the recent highs only in 2021.

    Either way, miners’ inability to move above the 61.8% Fibonacci retracement level and their invalidation of the tiny breakout is a bearish sign.

    The same goes for miners’ inability to stay above the rising support line – the line that’s parallel to the line based on the 2016 and 2020 lows.

    Thank you for reading our free analysis today. Please note that the following is just a small fraction of the full analyses that our subscribers enjoy on a regular basis. They include multiple premium details such as the interim target for gold that could be reached in the next few weeks. We invite you to subscribe now and read today’s issue right away.

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

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The U.S. passed a milestone! The federal debt in private hands surpassed 100 percent of GDP measured quarterly, in the second quarter of 2020. On an annual basis, it would exceed the size of the economy next year, due to a massive fiscal stimulus and a plunge in revenues amid the coronavirus crisis (however, the fiscal deficits and debts were already increasing significantly prior to the outbreak of pandemic). According to the Congressional Budget Office, the fiscal deficit will reach $3.3 trillion in 2020, more than triple the shortfall recorded last year. At 16.0 percent of GDP, the budget deficit would be the largest since the World War II. Is the US waging a war I don’t know about?

Read more in the latest Market Overview report.

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