The #TaperCaper manifested with vigor on a Fed pivot during its FOMC monetary policy announcement last Wednesday which included a new dot plot graph (page 4) that forecasts the slashing of interest rates next year. Any reference to it just being “dovish” is an understatement. There is a lot of overt and hidden financial distress that exists in the economy at home and abroad amid unprecedented political partisanship while war and geopolitical flashpoints are multiplying risks with capital seeking safe havens in today’s world. Instead of allowing the usual timelapse in between analyses on gold and silver’s price action, I wanted to get this out before Christmas. I wish you all a safe and joyous holiday weekend while celebrating precious time with friends and family who are closest to your heart.
Below are the hourly and weekly charts for gold and silver. 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 via 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. Today’s post includes the seasonality factor, a technical analysis of gold and silver, a collection of articles since publishing the early winter outlook on Nov. 30 (Twitter thread), and then closes shop with two choice interviews. To view a larger version of any chart or image below, mouse over it and select or right-click it and choose a “view image” option.
The most important takeaway from gold’s Nov. 30 weekly chart analysis:
“Volume is NOT rising with the rising price action, which is a negative. It looks like the all-time high zone will be challenged but expand into a consolidation pattern before leaving the all-time highs behind… A noticeable increase in buy Volume must accompany any upside move for it to be decisive.”
Gold Spot 2-hour chart Dec. 1-22, 2023 close…
Gold Spot weekly chart as of Dec. 22, 2023 close…
“After the price action tapped the low $1,800s on the 150 Exponential Moving Average (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 a 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.”
“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 healthy 14% 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 chart remains bullish, but caution is warranted until the all-time high zone is left in the dust.”
After a short respite from warfare on the Israel-Hamas battlefield with an exchange of prisoners and hostages, bombing resumed in earnest on the morning of Dec. 1 as Jay Powell prepared to deliver a speech on monetary policy. He provided a resounding hint that the FOMC policy decision on Dec. 13 would result in a continued pause in interest rate hikes. Both news events launched gold beyond the all-time high zone in the $2,070s at the GLOBEX open on Sunday evening, Dec. 3, but it was extremely short-lived with a muted buy Volume spike and the $2,145 high quickly morphed into a profit-taking bonanza before markets opened on Monday in the U.S. The FOMC announcement subsequently went much further than a pause and forecasted that interest rate cuts were slated for early 2024 with a recession on the horizon. Details on the FOMC pivot can be found in the list of articles below.
That rally shifted gold’s pattern dynamic on the weekly chart and confirmed an Inverse Head & Shoulders continuation pattern that’s drawn back to the 2020 high and is reminiscent of how the chart looked from 2008 to 2009 during the Great Financial Crisis before a spectacular rally to new highs. Nested within the right half of the current Inverse Head & Shoulders is an Ascending Triangle and a Cup & Handle pattern with a Neckline that was pierced on Dec. 3. As noted in the Nov. 30 analysis, if the all-time high zone was challenged without a coincident and sustained spike in buy Volume, the move would likely result in a Throwback and consolidation before leaving those all-time highs behind. It is healthy and preferred for the price action to build a base instead of moving too high too quickly. An Up Channel has formed while approaching the New Year’s holiday before a seasonal uptrend in price typically manifests through the heart of winter. Gold closed this week at $2,052.
The DMI-ADX is trying to complete a bullish Alligator Tongue setup, StochRSI is trending upwards, Money Flow, Momentum, and CCI are steady and trending upward, and all the moving averages are lined up perfectly, but the buy Volume needs to significantly improve as we move into the new year. The chart is bullish.
Silver Spot 2-hour chart Dec. 1-22, 2023 close…
Silver Spot weekly chart as of Dec. 22, 2023 close…
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, below the 23.6% Fibonacci level, then it 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.”
Excerpt from the Nov. 30, 2023 weekly silver chart analysis:
“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 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 the $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.”
Silver tagged along with gold until it ran into solid resistance at $26 and the 23.6% Fibonacci level. Its price action is also in a positive consolidation phase, so maybe silver will finally have the legs to break away from $26 in 2024 and challenge its $29 and $30 resistance levels. The overall pattern dynamic on the weekly chart has not changed since the Nov. 30 analysis. Do not misconstrue the price point as being low compared to gold because that factor allows much larger moves on a percentage basis in either direction. Silver closed this week at $24.18.
The DMI-ADX is unremarkable, StochRSI is struggling to remain positive but continues upward, and Money Flow, Momentum, and CCI are steadily trending upward. All the moving averages are lined up, and Volume has been exhibiting a slow upward trend since October, but it is far from what’s needed for a solid rally beyond $26. The chart is bullish.
- Gold Spot Rises to Record on Fed Powell’s Comments – Bloomberg
- Speculators add further fuel to gold rally – Saxo Bank’s Ole Hansen
- Gold hits $2,100 record on economic geopolitical uncertainty – CNBC
- Summer of Central Bank Gold Buying Extends Into the Fall – Peter Schiff
- The Reckoning Begins – Jim Rickards
- As Dollar Dies, The Future Is Paved With Gold – Gerald Celente (video / audio)
- Why Was the U.S. Silver Stockpile Raided by Dept. Of Defense? – SilverSeek
- Polish Central Bank Buys Gold According to Secret EU Plan – Jan Nieuwenhuijs
- Gold Outlook 2024 – WGC
- Geopolitics, central banks to provide support for gold in 2024 – Mining.com
- How much is a gold bar worth? – CBS News
- Game Changer: Fuel Cells Outpace Solar in Silver Demand by 10x – SilverSeek
- $15,000 Gold is Not a Guess – Jim Rickards
- Rickards’ Five 2024 Forecasts – Jim Rickards
- Goldbacks founder Jeremy Cordon with Lab Test Results – Mike Adams (video)
- Brief Summary of Fed FOMC Statement – Daddy ZeeJay
- Fed holds rates steady, indicates three cuts coming in 2024 – CNBC
- Fed FOMC Dot Plot Pencils in 2-3 Rate Cuts in 2024, Market Expects 4-5 – MishTalk
- Something is not right, Powell & Fed cronies’ divergent messages – Burning Platform
- ‘Sold Over $100 Million of Gold During 3rd Quarter’: Costco CFO – Epoch Times
- 1 oz Silver Coins Now Available at Costco – Costco
- From Pork-Barrel Spending To A Fiscal Slaughterhouse – Birch Gold (video)
- FED’S BARKIN: ECONOMY NOT AS FROTHY AS THOUGHT – Financial Juice
- Kitco Hacked, Down For Multiple Days After Cyber Security Incident – Bloomberg
- Sound Money Movement Strikes Gold in 2023 – Money Metals
- Oklahoma & Missouri to Eliminate Capital Gains Tax on Gold, Silver – Peter Schiff
- Fed’s favorite inflation gauge, November PCE falls – MarketWatch
- “Fed pivot” is an understatement – Kobeissi Letter
- Gold 12-month target upgraded to $2,200 from $2,150 – ANZ Bank
- Mark Jeftovic: The Fed is Afraid… of Something – Dollar Collapse
David Neuhauser: ‘Somebody has it wrong’ on recession as oil, gold, Treasuries diverge – CNBC, Dec. 11
DoubleLine’s Gundlach: 10-year Treasury yield will fall to 3% next year – CNBC, Dec. 14
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