Gold & Silver Still Bearish Short-Term, Then Going Skyward

Gold Market Analysis

Weeks ago, after we bottomed at $2326 in Gold, I stated that I expected a rebound in Gold to $2400, then down to $2300 or below. Well, we just hit $2395.

Yesterday, I ran an A-B-C count for the peak of wave B and I got this:

A peak at $2395, rounded up that’s $2400. Then if I do the same A-B-C for wave C using $2400 for the peak, I get $2272 on the downside, close enough to $2280:

The point being that despite the rally in Gold over the past couple of days, it looks like it still has a date with $2300 or more likely around $2280 for the bottom of wave C and wave 4.

Possible Breakout Scenario

However, if we do break $2400 easily and continue higher, then the bottom is very likely in place and we’re going much higher. But if it turns down from $2400 or thereabouts, then the target is $2300 at a minimum, in my opinion.

Impact of Rate Cuts on S&P and Gold

I also see that the S&P is at new all-time highs on higher rate cut expectations, following the Bank of Canada’s cut today and likely the ECB’s cut tomorrow. The S&P is also extremely bullish and the VIX looks ready to pop. All it is waiting for is a catalyst for a correction, and the Payrolls fit the bill. If we get a higher-than-expected Non-Farm Payrolls number on Friday, rate cut expectations collapse, and down goes the S&P. But the metals and miners could sink also, like a lead balloon to lower lows. Watch the 10Y and DXY rise also.

Predictions for Gold, Silver, and GDX

The fact is that I am not sure if the bottom is in or not for Gold, Silver, and GDX, but I have serious doubts backed up by data that suggest we’re going lower again before higher, MUCH higher. If Gold does drop to $2300 or below, Silver and GDX are heading down to $29 or less and $32 or less, in my opinion. Then it’s blast-off time!

Whereas if Gold closes above $2400, the bottom is likely in and we go straight up.

Final Thoughts on Precious Metals

Final comment, with markets becoming bullish on the possibility of a rate cut by the Fed, it would not surprise me if they pull the plug from under everyone with a surprisingly high Payrolls number on Friday. That said, I would not recommend shorting but use such reversals to buy the dips because we are going up to new highs next, in my opinion.