Waiting for High Probability Lows

My focus is on extremes, both at peaks and troughs in the metals and miners. This dramatically increases the probability of success in your trading and investments, and it provides the biggest gains relative to the risk of small losses, i.e., the risk-reward is heavily skewed in your favor. However, this takes incredible patience because these no-brainer trades don’t come along often, but they are certainly worth the wait. Using a baseball metaphor, I don’t swing at every pitch; I wait for the fat pitch to knock it out of the ballpark. This is when I go “All-In.”

Today I am going to provide a detailed update of Gold and Silver, both short-term and further out, using all the indicators in the FIPEST process to illustrate how they can provide mixed messages. It is only when they all line up and say the same thing that you can have a great deal of conviction in your trades and therefore significantly increase your chances of being right and generating significant profits.

Lastly, anyone who says that Gold and Silver will definitely hit a specific price with a 100% certainty is lying to you. We’re dealing with probabilities—the higher, the better.

Gold Market Analysis and Short-Term Trends

Daily Technicals for Gold

Price: Gold is attempting to break down out of its bearish flag. If confirmed, it could fall as far as $2450 next.
RSI: 49, coming off an extreme low of 31, its lowest level since October 2023 when Gold bottomed at $1824. But 49 tells us nothing. It’s neutral. There is no extreme here. No signal one way or the other. It could go higher or lower. It’s like tossing a coin: heads or tails. Ideally, we should have been buying at $2542, when the RSI was at 31, an extreme low. Now we have to wait for the next extreme at ~70 or ~30.
MACD Histogram: It has come off its lowest level since September 2011, when it reached $1535. It bottomed the same day as the RSI, Nov. 14. Now it’s turned positive, but it’s only at 4. Again, nothing definitive here. It’s a coin toss. I prefer 80-20 odds or higher, which were seen on Nov. 14. We need to wait for the next extreme peak or low.
MACD Line: The MACD Line is a slower indicator of momentum than both the RSI and the MACD Histogram, but it is far more definitive. It bottomed on Nov. 18 at the lowest level since October 2023, just as the RSI did two days earlier. It has been turning up since. However, at just -4, it could go either way from here.
Summary: While I could tell you what you want to hear, there are plenty of cheerleaders out there to do just that. I prefer to tell like it is, and that is inconclusive for now.

Weekly Technicals for Gold

Price: Gold is in a massive bear flag right now and has attempted to break down at least twice already. A break of $2542 would open the door to $2450 next.
RSI: 59, coming off an extreme high of 82. After such a peak at 82, the weekly RSI could have much lower to go OR we’re heading up to a negatively divergent higher high first. Again, at 59, there is no extremity to rely on from a probability perspective.
MACD Histogram: This has fallen precipitously to -13. It could go either way from here, but the odds favor lower.
MACD Line: This is the most damning signal for Gold! It is flat-out bearish! Having hit a blow-off top at 122—the highest level since Gold’s peak back in 2011, thirteen years ago—the likelihood that Gold will surpass that 122 level is next to ZERO. However, it does not negate the possibility of a negatively divergent higher high before it dumps. That said, it does suggest that Gold is either going down directly to lower lows or we get one more higher high followed by an even bigger drop next.
Sentiment: Sentiment has bounced back to moderately bullish. In other words, it’s basically neutral. Once again, no high probability one way or the other here.

Silver Market Analysis and Critical Levels

Daily Technicals for Silver

Price: Silver is trying to break out of its bull flag pattern. It remains to be seen if Silver is backtesting its breakout level and going higher thereafter or it’s a fake breakdown, which is bearish.
RSI: 52, tells us nothing. It’s neutral. There is no extreme here. It’s like tossing a coin: heads or tails.
MACD Histogram: 13 is far from extreme. Again, nothing definitive here.
MACD Line: The MACD Line is at -15 and climbing. If Silver holds its breakout level at ~$31.60 and turns up, then we can be more confident that we’re going higher, with a stop at $31.50 or below. But if Silver does break down, $29.75 is critical support. Below there, it’s look out below, to at least $28.

Weekly Technicals for Silver

Price: Gold is in a massive bear flag right now and has attempted to break down at least twice already. A break of $2542 would open the door to $2450 next.
RSI: 59, coming off an extreme high of 82. After such a peak at 82, the weekly RSI could have much lower to go OR we’re heading up to a negatively divergent higher high first. Again, at 59, there is no extremity to rely on from a probability perspective.
MACD Histogram: This has fallen precipitously to -13. It could go either way from here, but the odds favor lower.
MACD Line: Like Gold, the MACD Line in Silver is coming off a massive peak of 173! It is now down to 91 and falling. It has a lot of room to fall much further. At the same time, it does leave open the possibility of a negatively divergent higher high anywhere below 173, but seeing is believing at this point.
Sentiment: Sentiment is neutral in Silver, which tells us nothing.

Conclusion: Focus on Patience and Probabilities

Nothing is definitive now, so I don’t recommend doing anything at this time. If we are heading lower, the various indicators are much more likely to be aligned at the bottom for the next big leg up. The same goes for a negatively divergent higher high next, should that play out. Wait for the extremes across multiple indicators, then dive in. Don’t force a trade in such uncertain market conditions. That would be gambling, basically. Patience is everything right now. Wait for the right setup where the probabilities are weighed heavily in your favor. Wait for the fat pitches to hit a home run! There is nothing to suggest that either way right now. For those of you with a longer investment timeframe, physical Gold and Silver are your best bets.

Invest in gold or buy silver now to secure your future.