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Metals and Miners Bide their Time

Gold coin on newspaper

 

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With little in the way of events over the holiday period, I’ll keep this week’s report brief…

GOLD

Gold

Gold is currently trading at 1815. If we close here, it’ll be a higher high and the highest close since November 19 at 1852. That said, we’re still trading around the moving averages. A break above 1880 would go a long way to confirming that the bottom is in. But the risk of a dump in stocks remains a potential catalyst for further downside.

SILVER

Silver chart

As forecast, Silver ran into resistance at its 50-day moving average following its rally off a positively divergent double bottom and a break of resistance at ~22. Support is now at 22.60. A break above the 50-day moving average followed by a higher low would go a long way to signaling a green light for the rally to the 30s next.

GDX

GDX

Same story, different asset. GDX has run into resistance at its 50-day moving average. Above there awaits the 200-day moving average providing resistance at ~33. The all-clear signal I’m looking for is a break of above the prior high of 34.50. Support at 30.84 and 30.15.

SILJ

SILJ

SILJ hasn’t even reached the 50-day moving average but I certainly would rule out a test of it. 12.76 is resistance ahead of that. Support is at 12.08 and 11.81. Again, I am looking for a higher high above the 50-day moving average, then a higher low, and then a break of the previous high of 14.50 to set us up for the rally to 25-30.

At the risk of being a broken record, I am patiently waiting for dump in stocks, oil, bond yields, and a reversal in Fed policy to more QE to truly kick off the next rally in metals and miners. It’s inevitable, imho, perhaps driven by another general lockdown as in March 2020. The only alternative is a systemic collapse of everything.

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About the Author

David Brady has worked for major banks and corporate multinationals in Europe and the U.S. He has close to thirty years of experience managing multi-billion dollar portfolios including foreign currency, cash, bonds, equities, and commodities. David is also a CFA charter holder since 2004.

Using his extensive experience, he developed his own process utilizing multiple tools such as fundamental analysis, inter-market analysis, positioning, Elliott Wave Theory, sentiment, classical technical analysis, and trends. This approach has improved his forecasting capability, especially when they all point in the same direction.

His track record in forecasting Gold and Silver prices since has made him one of the top analysts in the precious metals sector, widely followed on Twitter and a regular contributor to the Sprott Money Blog.

*The author is not affiliated with, endorsed or sponsored by Sprott Money Ltd. The views and opinions expressed in this material are those of the author or guest speaker, are subject to change and may not necessarily reflect the opinions of Sprott Money Ltd. Sprott Money does not guarantee the accuracy, completeness, timeliness and reliability of the information or any results from its use.

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