Payrolls to Trigger the Breakout in Gold & Silver

GOLD

Extreme overbought on the daily chart. Extreme bullish. Payrolls tomorrow. 

I believe Gold has topped out here and a sharp but short pullback to at least $2100 is in the cards tomorrow, with the Payrolls data being the catalyst. But I expect this to be a great buying opportunity for what happens next. If Gold holds $2080 and takes out $2200 next, move over Bitcoin. Gold could go wild to the upside.

By contrast, if we slice thru $2080, then it’s back to the drawing board. But this is a low probability proposition, imho.

SILVER

Silver is not as overbought as Gold, but it too is looking toppy here, and as always, if Gold goes down sharply, Silver will likely fall even more on a percentage basis. $23.50 has been resistance on the way up and will likely act as support on the way down. I consider this a great buying opportunity, and if we break out to a new higher high above $24.80, Silver could go ballistic, short-term pullbacks aside.

GDX

The miners are highly correlated to Silver, so if Silver goes south, GDX likely falls even more. Initial support is at $28.60, where the first gap is below. The more important one is the second gap to $27.45. From there we should see a rally to $30.50, at least, to close the gap on the upside before a short-term pullback, then “CYA” time to the upside.

10-Year Yield (“10”)

The 10Y is oversold in the short-term and extreme oversold on the one-hour chart. It’s due a short-term rebound. Again, the Payrolls data should act as the catalyst for such a move. My target is up to as much as 4.30% at most, but then down it goes to ~3.50%, imho. You know what that means for the DXY and metals. This would support the big rally in the metals and miners I referred to above.

DXY

I believe the top is in for DXY and we have begun the move down to $92-$94 aided by lower bond yields concurrently. But it is extreme oversold on the one-hour and four-hour charts, signaling an imminent rebound tomorrow, alongside higher bond yields, to $103.40-70, then look out below to $94-$92. This obviously supports a big rally in the metals and miners next.

Conclusion on Precious Metals Prices

Of course, anything could happen with Payrolls data, but the metals, miners, 10Y, and DXY all signal a big move up in Gold and Silver. So, whatever result we get tomorrow, I still expect Payrolls to be the catalyst for the aforementioned moves: metals and miners sharply down initially, followed by a breakout to the upside in the metals and miners that is likely to be spectacular, imho. Get your shopping lists ready for the dip and what follows!