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.” Gold’s price consolidation from 2013 until the summer of 2019 when $1,380 was decisively left in the dust reminds me of the current legacy media uselessness. There are too many examples since gold bottomed in 1999 showing presstitute punditry is laughable and manipulation sycophants must whine themselves to sleep after buying tops and selling bottoms.
As recently as Sep. 2022, the WSJ did it again by claiming “gold loses status as haven.” I suppose most folks are gluttons for punishment. It is much more fun to provide the plebes with realistic and reasonable analyses focused on profit and capital preservation with proven methods to execute timing for low-risk trading entries, core position investing, or purchasing coin (aka money).
Let’s start today with an excerpt from the July 2023 analysis:
“The precious metals have traded in correlation to their usual seasonality buying patterns over the last year, and a summer rally appears to be underway after the bottoming price action in late June followed by yesterday’s price spike on the latest CPI inflation report. Despite opinions to the contrary among some analysts and whiners, the buck stops at the charts, and they indicate that gold and silver have traded in a Steady Eddie uptrend since fall of last year with seasonal rips and dips and dollar divergences.” – TraderStef
There was a $100 gold rally in late June thru July, and silver had a $3 run from mid-June to mid-July. Gold has rallied $190 this month already, and silver has followed with a $3 spike. A heads up on the summer and fall rally launches were posted in a Twitter thread under July’s published analysis. Octobers are usually part of a late summer and early fall consolidation pattern as India’s fall wedding season gets underway and the West gets back to work before their holiday season. This year is a little different with the potential for nuclear war to break out on a biblical scale and the “meat grinder” in Ukraine metastasizes into the Middle East.
Futures seasonality for gold and silver as of Oct. 20, 2023…
Below are the weekly charts for gold and silver. I have repeatedly noted 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 ETFs, spot, options, futures contracts, or mining stocks does not necessarily equate to the timing for purchasing physical bullion and coins. Note that the American Silver Eagle and Gold Eagle coin premiums remain elevated and are likely to stay that way into 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 hourly chart as of Oct. 20, 2023 close…
Gold Spot weekly chart as of Oct. 20, 2023 close…
Excerpt from the Jun. 9, 2023 weekly gold chart analysis:
“The Flag Tilt resulted in a new all-time high for gold spot at $2,078 (COMEX Futures $2,085) during the first week of May but barely breached the Broadening Right-Angled Descending Pattern’s topside trendline. Resistance in the $2,070s halted further gains, and the price closed on a bearish Plunger Candle (aka Shooting Star). The pullback found support at the 21 Exponential Moving Average (EMA) with a low at $1,932, and this past Friday closed at $1,960 (COMEX Futures $1,977) with an indecisive Green Candlestick below the 78.6% Fibonacci retrace level. Seasonality has held true this year, and a summer rally appears to be in the cards… Odds are high that the Fed will pause interest rate hikes that will likely rally gold… The DMI-ADX is in an extended power trend setup… StochRSI is partially oversold, Momentum, Money Flow, and the Commodity Channel Index (CCI) are relatively flat… the CoT report data stagnated last week, seasonality indicates more consolidation, and sell volume was falling through the current pullback, which is positive. The chart is bullish, but I remain cautious until $1,980 and the all-time high are taken out decisively on strong buy volume.”
“Gold pulled back to the 50 EMA and $1,900 lateral support before pivoting upward and breaking out this week from a Falling Wedge. At 4pm, gold was trading at $1,960. As noted earlier, this week’s CPI inflation data led markets to believe that the Fed will refrain from raising interest rates or only increase by 0.25% once more this year. The report plunged the dollar and spiked gold and silver. 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.”
As mentioned earlier, there was a $100 gold rally in late June thru July available to trade. Instead of continuing into August, there was a pullback when the 50 EMA was breached on some Goldilocks Federal Reserve economy news. After the price action tapped the low $1,800s on the 150 EMA, a Half-Staff Flag was complete and the $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 news, 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 in case a breach of the all-time high turns into a runaway train.
The DMI-ADX is twisted without a clean Alligator Tongue power trend setup due to the sudden spike in the price action, the StochRSI, Money Flow, Momentum, and 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.
Silver Spot hourly chart as of Oct. 20, 2023 close…
Silver Spot weekly chart as of Oct. 20, 2023 close…
Excerpt from the Jun. 9, 2023 weekly silver chart analysis:
“Silver rallied to a $26.13 high in early May and morphed into a Falling Wedge…The DMI-ADX is still trending positive, StochRSI is partially oversold but attempting to recapture an uptrend, Momentum, Money Flow, and the CCI are relatively flat but elevated, the CoT report data stagnated last week, seasonality indicates more downside or consolidation, but sell Volume was falling through the current pullback which is positive. I remain cautious until resistance at $26 and $27 are breached and $29 and $30 are taken out decisively on strong buy Volume.”
“Silver’s extended Falling Wedge pivoted off the 150 EMA at the end of June and printed a higher low, which is steepening the price action… 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 is likely to rally with gold this summer and challenge $29 and $30.”
Silver demand is growing faster than the supply:
“Demand for silver surged by 18% last year, reaching a record-breaking 1.24 billion ounces and resulting in a significant supply deficit. The Silver Institute forecasts that shortages are likely to continue.” – First Majestic, Oct. 16
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 price action chopped thru August and early September until the 150 EMA was taken out following gold’s pullback. The Falling Wedge has morphed into a much tighter Descending Broadening Wedge after a violent pivot to the upside off the low $20s and 200 EMA. 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.
Let’s close shop tonight with links to articles since July and a brief overview on where the current battlefields in Ukraine and Israel are leading.
- The BRICS Go For Gold – Forbes
- We’re at War! (Currency Wars) – Jim Rickards
- JPMorgan Sees Gold Charging to Records in 2024, Fed Rate Cuts – Bloomberg
- AFROCOM head: BRICS payment system will replace SWIFT – RT
- United States Sovereign Debt Downgraded to AA+ – Armstrong Economics
- Arkansas Makes Gold & Silver Legal Tender – Tenth Amendment Center
- A World Of De-dollarization Is Gold Remonetized – Money Metals
- Central Bank Gold Demand First Half of 2023 Highest on Record – Peter Schiff
- Biden Administration Staggers Toward Debt Default – Institutional Risk Analyst
- De-dollarization “Irreversible” – Putin Tells BRICS Summit – RT
- West Is Losing Control Over Gold Price – The Gold Observer, Jan Nieuwenhuijs
- How to Bring the U.S. Back onto the Gold Standard – Robert F. Kennedy Jr. (video)
- Recency Bias Is a Gold Investor’s Worst Enemy – Gary Savage
- ‘Little reason’ to expect disruption to precious metals rally – Investment Week U.K.
- Japanese Panic Buy in a Gold Rush – OilPrice.com
- Gold the Only Way Out for Central Banks – The Gold Observer, Jan Nieuwenhuijs
- FBI Sued After ‘Losing’ Valuable Rare Coins It Seized During Raid – Epoch Times
- Can’t Bribe Democrat Senators w/cash, must have Gold Bars– Matt Gaetz (video)
- Costco Selling Out Of Gold Bars In Hours – Epoch Times
- Oil, gold jump on Middle East conflict; US stocks end higher – Reuters
- The 10 largest undeveloped silver deposits in the world – Mining.com
- Silver Price Inexcusably Low Given the Market Dynamics – Peter Schiff
- Brink’s Sues Air Canada Over $17 Million Gold and Cash Heist – Bloomberg
- JPMorgan CEO Jamie Dimon: ‘the most dangerous time’ for the world – CNBC
- Your Econ Professor Lied to You – The Daily Reckoning
- LBMA 3Q23 Precious Metals Market Report – LBMA
- Saxo Bank’s Ole Hansen: ‘Gold could hit record high’ – CNBC India (video)
- Mideast turmoil pushes safe-haven gold closer to key $2,000 – Reuters
- Rattled Biden administration fears wars could spread – AXIOS
The following articles on the Ukraine and Israel wars and today’s post has a Twitter thread with real-time updates:
- Surge of Little Green Men Part XVI: Checkmate – Sep. 29 (thread)
- Reckoning: JERUSALEM! The Hamas in the Box Effect – Oct. 13 (thread)
Col. Douglas Macgregor: Biden bringing U.S. to Armageddon – Judge Napolitano, Oct. 20
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Headline Collage Art by TraderStef