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More Downside Still Ahead but the Worst Is Behind Us


The data says Gold and Silver have further to fall, but we’re far closer to the bottom than we are to the next record high.



The Banks increased their net short position "again" to 194k contracts.

That is the highest net short position since April 2022 when Gold fell from 2000 to 1618. It is also far in excess of the net short position at the May 2023 peak when Gold fell from 2085 to 1824. In 2022, Gold didn’t bottom until the Banks had a minimum net short of 50k contracts. In 2023, it was $72k. That’s a huge amount of shorts to cover. It should come as no surprise that Gold continues to fall.


Since the peak on December 4, sentiment has been heading south, but it still remains relatively neutral. Bottoms in Gold and Silver are typically associated with extreme bearishness, which means sentiment has further to fall.


10Y Yield

10Y Yield

The 10Y yield has turned up. The MACD Histogram in blue suggests a short-term pullback, then up we go to 4.25-4.40%. The RSI and the MACD Line are trending higher. Thereafter, I expect it to fall to lower lows.



It should come as no surprise that we’re seeing the same thing in DXY. It ran into resistance at 102.75 and is staging a short-term pullback, but I expect it to continue higher thereafter to 103.75-105, using a simple A-B-C correction formula. Thereafter, I expect the DXY to fall to the 90s.

Suffice to say in the short-term, higher yields and a higher DXY will continue to weigh on precious metals.


Focusing on fundamentals as a catalyst for moves in the market, the CPI data is due out tomorrow. The Fed focuses on the core CPI numbers highlighted below, and specifically the year-over-year figure:


A friend of mine, the Silver Surfer, referred me to Steven Anastasiou (@steveanastasiou), who has displayed a consistent ability to forecast economic data by going through each of the underlying components. He expects core CPI growth to fall from 4.0% to 3.9% YoY. If he is right, and we’ll likely know before this article is published, this would be higher than expected. This could be the catalyst for the next leg down below 2000 in Gold and 23 in Silver.

But I don’t believe it ends there. Given all the data in hand, my target ranges for the bottom in Gold and Silver are 1962-1923 and below 22, respectively.

gold chart

Once we bottom in or around these levels, I expect Gold to go to 2200-2400 and Silver to 28-30.

Don’t miss a golden opportunity.

Now that you’ve gained a deeper understanding about gold, it’s time to browse our selection of gold bars, coins, or exclusive Sprott Gold wafers.

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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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