Potentially Some More Downside; Fundamentals Remain Long-Term
Over the past two days I highlighted the risk of a bearish scenario with me stating it was the first time I was somewhat bearish in the near-term for Gold and Silver. It seems that for now my bearish scenario of a near 1484-1486 drop could pan-out before a bounce.
We are simply in a correction before the next long wave up in precious metals so it is very crucial not to get discouraged.
Currently, I see a moderate risk for more downside into the 1484-1486 range (very slight risk down to 1470) levels before we re-test the 1540s off the back of a likely ECB QE announcement on Thursday. From there it will be up to the Fed in a big way. If the Fed cuts 25bps+, my target of 1600 by October 1 that I posted several months ago still remains fully in-tact. If the Fed holds rates steady (which is unlikely, particularly since that would cause a massive general market sell-off), Gold would retrace back into the 1510-1519 range and would await further (future) catalysts for a subsequent rise and remain under pressure around the 1500 mark.
The overall trend for Gold and Silver is extremely bullish, however, like I have noted previously, until we start ramping up rate cuts from the Fed, it will take a little to get to significant highs in Gold/Silver. Moreover, that could be in as little as 1-2 weeks, or it may be in October or November.
Keep in mind though this is a tough call and I am simply highlighting the potential for a further drop. It is possible we bounce from the low to mid 1490s. I do not focus on shorts and my general philosophy remains the same - buy the lows overtime and hold long.
Keep your eyes peeled to the ECB meeting this Thursday and the Fed next week.
Time will tell. As always, stay patient.
Expectations
- ECB announces QE on Thursday
- Powell cuts 25bps Sept 18/19
- Both events should they occur, drive Gold drastically higher than the current price
- zSplit
We are simply in a correction before the next long wave up in precious metals so it is very crucial not to get discouraged.
Currently, I see a moderate risk for more downside into the 1484-1486 range (very slight risk down to 1470) levels before we re-test the 1540s off the back of a likely ECB QE announcement on Thursday. From there it will be up to the Fed in a big way. If the Fed cuts 25bps+, my target of 1600 by October 1 that I posted several months ago still remains fully in-tact. If the Fed holds rates steady (which is unlikely, particularly since that would cause a massive general market sell-off), Gold would retrace back into the 1510-1519 range and would await further (future) catalysts for a subsequent rise and remain under pressure around the 1500 mark.
The overall trend for Gold and Silver is extremely bullish, however, like I have noted previously, until we start ramping up rate cuts from the Fed, it will take a little to get to significant highs in Gold/Silver. Moreover, that could be in as little as 1-2 weeks, or it may be in October or November.
Keep in mind though this is a tough call and I am simply highlighting the potential for a further drop. It is possible we bounce from the low to mid 1490s. I do not focus on shorts and my general philosophy remains the same - buy the lows overtime and hold long.
Keep your eyes peeled to the ECB meeting this Thursday and the Fed next week.
Time will tell. As always, stay patient.
Expectations
- ECB announces QE on Thursday
- Powell cuts 25bps Sept 18/19
- Both events should they occur, drive Gold drastically higher than the current price
- zSplit
