Immediately following the sell volume capitulation callout on Twitter as gold consolidated between $1,810 and $1,830 within a Rectangle Bottom in early October, Hamas invaded southern Israel on Oct. 7. That news launched gold into its first powerful wave of the current rally that coincides with seasonality trends. When the IDF notified the population of northern Gaza Strip to evacuate to southern Gaza on Oct. 13, another price surge left $1,900 in the dust. In a “buy the rumor, sell the news” scenario, gold tapped $2,000 when the IDF entered northern Gaza in full force on Oct. 27, but an overbought condition in gold needed a breather and the price action promptly retreated into the $1,920s by Nov. 13.
Since then, numerous economic data points, additional fiscal policy issues about the U.S. national debt, leadership on Capitol Hill, Fedspeak engagements, and financial pundits have all pointed to an end of interest rate hikes with cuts likely to arrive no later than the spring of 2024. Monetary policy expectations on the heels of war have contributed to juicing the stock market as gold continued to rally this week and tapped $2,052 on the Forex spot chart and $2,091 in COMEX futures. Silver’s rally might appear muted due to its lower price point, but the gain in percentage terms is nearly double that of gold’s since early October despite recessionary pressure due to its industrial demand that accounts for roughly 50%.
Before exploring a technical analysis of the gold and silver charts, here is a collection articles since publishing the outlook for fall on Oct. 21, along with an excerpt:
“With the world on the brink of WW3 due to Ukraine’s NATO proxy war against Russia and “Israel’s 9/11” following Hamas’ breach of the Gaza border two weeks ago where they slaughtered over a thousand Israelis and foreign nationals, gold’s safe haven status and silver tagging along for a ride are suddenly back in vogue. While observing the hourly price action in gold during the last two weeks, I had a déjà vu moment about those infamous WSJ articles in 2015 and 2016 when gold was ineptly equated to a ‘pet rock.’” – TraderStef
- Exclusive: China’s Monster Silver Buyer Revealed – GoldFix
- Russians are buying precious metals for bank accounts – IZ Russia
- Estimated World Official Gold Holdings Reach Record High – Jan Nieuwenhuijs
- Gold Demand Trends Q3 2023 – World Gold Council
- Gold is officially outperforming stocks in 2023 – MarketWatch
- This “Unprecedented” Fiscal Doom Loop Is Getting Worse – QTR
- Economist Grigoriev: gold is the most profitable investment option – IZ Russia
- Expert Spinka: the price of gold is rising amid the Middle East conflict – IZ Russia
- Central Banks on Course for “Colossal” Year of Gold Buying – Peter Schiff
- $2,000 gold is just the beginning – Sovereign Man
- Central Bank Gold Reserves by Country – World Gold Council
- Newsweek: “China is Hoarding the World’s Gold” – GoldFix
- China PBoC in a Hurry to Buy Gold: 593t of YTD – Jan Nieuwenhuijs
- Cooling Inflation Likely Ends Fed Rate Hikes – WSJ
- U.S. Enters Dangerous New Phase in Shadow War With Iran – DNYUZ
- ECB Interest Rates- Lagarde Says Can Pause, Assess – Bloomberg
- Bank of America’s 2024 Gold Analysis – GoldFix
- Gold at six-month high as dollar declines and investors eye rate cuts – CNBC
- Is Gold Finally Heading for a New Record High? – Bloomberg
- Wealthy Chinese smuggling gold & pouring billions into Western banks – Daily Mail UK
Below are the weekly charts for gold and silver. I repeatedly note in analyses that a weekly candlestick chart focuses on the potential price movement for a few weeks. Be mindful that a window of opportunity for swing or scalp trading precious metals ETFs, spot, options, futures contracts, or mining stocks does not necessarily equate to the timing for layering core positioning or purchasing physical bullion and coins. American Silver Eagle and Gold Eagle coin premiums remain elevated and are likely to stay that way in the foreseeable future. To view a larger version of any chart below, mouse over it and select or right-click it and choose a “view image” option.
Gold Spot weekly chart as of Nov. 30, 2023 at 4pm ET…
“Each time gold rallied into the $2,070s since 2020 and failed, it created additional resistance to work through at the next attempt… IF Momentum and Money Flow increase while working through overhead resistance, the price action will likely challenge the all-time highs… The chart is bullish, but caution is warranted until the all-time high in the $2,070s is left in the dust.”
“After the price action tapped the low $1,800s on the 150 EMA, a Half-Staff Flag was complete and a $190 rally spiked through the Flag’s topside trendline. This rally is the upside of a Partial Decline that could take out substantial lateral resistance at $1,980 and the all-time high on the Broadening Right-Angled Descending Pattern’s topside trendline. This rally is fueled by the Israel-Hamas war, and there’s a high probability of it becoming a Middle East conflagration with Russia supporting its allies. India’s wedding season is secondary, but there could be rush to buy taking place in India. The DMI-ADX is twisted without a clean Alligator Tongue power trend setup… the StochRSI, Money Flow, Momentum, and Commodity Channel Index (CCI) are all indicative of additional price gains in the near-term, and Volume rising with price is a positive. The chart is bullish, but caution is warranted until $1,980 and all-time highs in the $2,070s are left in the dust. The dire geopolitical situation is not what any gold bull wants to see and be the reason for a wicked rally. A financial crash most folks can deal with, but war on a biblical scale is not what sane plebes want to live through.”
Since gold’s $1,810 low during the week of Oct. 1, the price action rallied to a high of $2,052 today, which is just shy of a healthy14% gain that is closing in on the $2,079 high from the week of May 1, 2023. I provided a notice and chart via Twitter on Nov. 26 that highlighted a Cup & Handle pattern that was developing. Its Neckline is layered over the Broadening Right-Angled Descending Pattern’s topside trendline that is drawn back through three taps within the all-time high zone between $2,070 and $2,079 since August of 2020.
The DMI-ADX is still lacking a clean Alligator Tongue power trend setup, the StochRSI is rising, and the Money Flow, Momentum, and CCI are all indicative of the potential for additional price gains in the near-term, but Volume is NOT rising with the rising price action, which is a negative. It looks like the all-time zone will be challenged but expand into a consolidation pattern before leaving the all-time highs behind. It would only take one news story to launch it through that overhead resistance. A noticeable increase in buy Volume must accompany any upside move for it to be decisive. The weekly candlestick could revert to a Plunger Candle (aka Shooting Star) if a substantial pullback occurs before tomorrow’s close. In that case, the price will consolidate before breaching the topside resistance. The chart remains bullish, but caution is warranted until the all-time high zone is left in the dust.
Silver Spot weekly chart as of Nov. 30, 2023 at 4pm ET…
Excerpt from the Jul. 13, 2023 weekly silver chart analysis:
“The next resistance is around the 23.6% Fibonacci level that is just shy of $26… The DMI-ADX is positive but has not entered a new power trend, StochRSI is attempting a rally out of its oversold condition, Momentum, Money Flow, and the CCI bottomed out and are turning upward, and Volume is steady but unremarkable. IF the Momentum and Money Flow increase, silver will rally with gold this summer.”
Excerpt from the Oct. 21, 2023 weekly silver chart analysis:
“Silver had a $3 run from mid-June to mid-July and ended just shy of $26 that’s below the 23.6% Fibonacci level, then the chopped thru August and early September until the 150 EMA was taken out following gold’s pullback… Silver has rallied exactly $3 over the last three weeks on this week’s closing print. The uptrend of higher lows and higher highs since the 2022 lows remains intact. The DMI-ADX is twisted just like the gold chart due to the sudden rally on war news, the StochRSI, Money Flow, Momentum, and CCI are all struggling to hold onto an upward spike, and Volume remains unremarkable. If gold continues to rally, silver’s technicals will improve and the price will follow. Resistance at the $26 level must be left in the dust for $29 and $30 to be reached.”
Since silver’s $20.68 low during the week of Oct. 1, the price action rallied to a high of $25.28 today, which is slightly more than a 22% gain. The price action is closing in on $26 and the 23.6% Fibonacci level for a third tap. Like gold, silver also has a Cup & Handle pattern developing with a Neckline just above $26 resistance. It is nestled within an Ascending Triangle that has printed higher lows since August of 2022. For silver to have enough momentum to challenge $29 and $30, $26 must be left in the dust decisively with rising buy Volume.
The DMI-ADX does not yet have a clean Alligator Tongue power trend setup, StochRSI is rising, and the Money Flow, Momentum, and CCI are all indicative of the potential for additional price gains in the near-term, but Volume remains UNREMARKABLE. The chart is bullish, but caution is warranted until $26 is left in the dust.
Peter Schiff: Things Are Doomier & Gloomier Than They Look – Real America Nov. 9
Bill Ackman sees a Fed pivot to rate cuts “pretty soon” – Bloomberg, Nov. 29
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Headline Collage Art by TraderStef