Charts Say Gold & Silver Going Lower

GOLD PRICES ANAYSIS

Daily

• Double top at $2450.
• Bearish Flag—Potentially very dangerous if $2326 is broken, especially given the gap to 200-DMA.
• Below $2285 is a lot of thin air to $2150 and then the 200-DMA.
• RSI and both MACDs are all bearish.

Weekly

• The weekly RSI and MACD Histogram have already turned down from historically extreme peaks since 2011 or, in the case of MACD H, exceeding 2011.
• The MACD Line has only just started to turn down, which is bearish.
• There is the risk of a possible negatively divergent higher high before heading lower.
• Possible downside target and massive support is at ~$2100.

Gold looks like it is not done on the downside. Minimum target is $2285, but $2150, $2100, and the 200-DMA are possible too.

SILVER PRICES ANAYSIS

Daily

• A wonderful and powerful channel has developed in Silver.
• Either we’re heading up to the peak of 5 of (3) at $34+ and likely a negatively divergent higher high OR…
• We have just seen wave A and B of 4 and wave C down to $29.50 in C is next to complete wave 4, sending the RSI and both MACDs lower.

Weekly

• Steep rise in Silver. Can it be sustained?
• RSI and both MACDs are at their highest levels since the record peak in August 2020 = extreme overbought, but it could go a little higher first.
• Risk of multiple negative divergences in the RSI.

The odds favor the downside next.

GOLD:SILVER RATIO (“GSR”)

Daily

• Steep drop, extreme oversold, and positively divergent.
• RSI and MACD H showing a positively divergent lower low.
• RSI and MACD Line at or coming off their lowest levels since July 2020, i.e., extreme oversold.

Weekly

• Steep drop but could reach 70 before rebounding.
• RSI approaching extreme oversold levels but may need a positively divergent lower low to turn up.
• MACD H positively divergent already.
• Remains to be seen in MACD Line but now positively divergent.
• RSI and both MACD H at most oversold levels for 10 years, save for one period in July 2020. MACD Line too.

Although the GSR could go a little lower to ~70, the risk-reward profile is skewed to the upside, meaning Gold will outperform Silver.

GOLD/GDX RATIO (“GGR”)

The GGR is in a clear bullish flag. It is supported by positive divergences on all indicators and at a key support level at ~65.

Gold will likely outperform GDX going forward.

CONCLUSION ON PRECIOUS METALS PRICES

The daily and weekly charts signal further downside in Gold and Silver, with Gold outperforming both Silver and GDX, i.e., Gold falls less.

Such reversals should be welcome. They provide the fuel for the next big leg up to much higher highs.

Summary: Bearish in the short-term, but extremely bullish thereafter.