One More Dump or Massive Pump Next

I am expecting that Gold and Silver will end the day at or around $2030 and $22.50, because this is where the Banks maximize their gains on expiring worthless puts and call options. The question is where they go next.

My primary view since Dec. 3 remains that Gold falls to $1962 to $1923, worst-case $1900, and then begins its rally to new record highs. 

Similarly, Silver drops to $21.34, ideally, but bottoms out anywhere between $20-22. In fact, it may have already bottomed out at $22 on Monday.

However, Gold still needs to break and close below 2000 conclusively. This goes for Silver too at $22. Until then, there is a lower probability scenario (but not an insignificant one) that if Gold breaks a higher high above $2042, it goes ballistic. Again, it’s the same for Silver above 23.72, the recent double top. The corrections in both metals have been sharp and steep from $2152 and $26.34 respectively. If we break to the upside, the rally could be equally as violent.

We’ll know more after the OpEx today and the COT data tomorrow. I expect that the Banks have cut their short positions again, and they may even be long in Silver at this point.

Sentiment remains stubbornly bullish in Gold, increasing the odds of further downside ahead. Silver is closer to neutral.

The daily RSIs in both metals are close to neutral, meaning Gold and Silver could go either way.

The 10-Year yield continues to struggle to reach my peak target between $4.25-4.35% before it heads lower again. If it peaks here or below 4.25%, then the bottom in Gold and Silver may already be in place.

The same goes for the DXY, which is still struggling between $103.00-103.50. My target for the peak is $104.50-105.00. If the DXY reaches that range, Gold and Silver should continue to fall to lower lows. But if the DXY fails here, as with the 10-Year, then the bottoms are in place.

In summary, the primary forecasts remain in place, but there is a risk that the bottoms are already behind us. The support level at $2000 and resistance at $2042 are crucial in Gold. In Silver, it’s $22-23.72. Which side breaks will determine whether we get a final lower low or we have already seen it. Either way, the remaining downside risk is limited and the upside is far, far greater!