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. Short of an economic miracle or divine intervention that manifests a sudden breakout of peace between Russia, Ukraine, and NATO, the Fed’s monetary policy is settling into a pause, and BRICS+ nations are slated to launch a gold-backed trading currency in August that will accelerate de-dollarization.
End of credit backed dollar with a gold backed BRICS trading currency – RT, Jul. 8
Let’s begin today with a few articles to consider since the early summer analyses, then a technical analysis on the dollar, gold, and silver, and we will close shop with Jeffrey Gundlach’s CNBC interview on the Fed’s FOMC #TaperCaper announcement and Col. Douglas Macgregor’s outlook for the U.S. economy, Ukraine war, and 2024 election.
- Gold Could Reach $2,500 Amid A Flight To Safety – Blue Line Futures (video)
- Gold Bar Vending Machines In Korean Convenience Stores– UPI
- Shanghai International Gold Exchange De-Dollarization Role – Jan Nieuwenhuijs
- End of Rs 2000 cash a win for gold, real estate, consumer – Business Standard India
- BRICS Gold Backed Currency Biggest Monetary Shock in 52yrs – Jim Rickards
- Fed Chair Jerome Powell’s Open-Mouth Operations – Peter Schiff
- Why the World Is on the Brink of Great Disorder (Gold) – TIME
- How Is the Spot Price for Gold Determined? – Peter Schiff
- Delusional: Gold Is No Longer a Good Hedge Against Bad Times – Bloomberg
- Gold Mid-year Outlook 2023 – WGC
- Gold Back Currency Reality – Armstrong Economics
- Ponzi Scheme: Over half a million silver coins just vanished – Business Insider
- Invesco Survey Shows Sovereign Investors Embrace Bonds & Gold – Bloomberg
- Inflation at 3% Flags End of Emergency, Turning Point for Fed – Bloomberg
- The world’s largest silver producers-miners in Q1 2023 – report – Vladimir Basov
To view a larger version of any chart below, mouse over it and select or right-click it and choose a view image option.
CPI Inflation in U.S. Decelerates by More Than Forecast
World’s Largest Silver Producers in 1Q23
Futures seasonality for gold and silver as of Jul. 13, 2023…
Below is the technical analysis of weekly charts for the dollar, gold, and silver. Be mindful that a window of opportunity for swing or scalp trading ETFs, mining stocks, or futures contracts does not necessarily equate to timing for buying physical bullion or coins. The American Silver Eagle and Gold Eagle coin premiums remain elevated. A weekly candlestick chart focuses on the potential price movement for a few weeks.
$DXY Dollar vs. Gold weekly chart as of Jul. 13, 2023 at 4pm ET…
The dollar finally plunged through support this week. A threat that it might decisively break below the Head n’ Shoulders Neckline was noted in my Apr. 28 analysis:
“The USD rallied off a Double Bottom in 1H21 and accelerated in March 2022 after the Fed launched a hawkish quantitative tightening (QT) monetary policy and began hiking interest rates. The rally ended in late summer through fall 2022 after the Fed hinted that an end to its aggressive rate hikes was on the table (aka Taper Caper). The dominant pattern is a bearish Head n’ Shoulders with a neckline at around 101.00, and last week’s price action closed at 101.62. If the neckline is breached with conviction on high sell volume, gold will likely rally beyond its $2,070 to $2,075 all-time high zone. If a hard-landing recession prompts the Fed to launch a version of quantitative easing (QE), be aware that large speculators and institutions might liquidate some gold positions for cash to cover margin calls if financial markets spike to the downside. A similar situation played out during the great financial crisis (GFC), but gold pivoted well before stock indices printed their lows and outperformed with a higher high before stock markets regained losses. The DMI-ADX is set up for an Alligator Tongue power trend as the dollar threatens to decisively break below the Head ‘n Shoulders neckline. The StochRSI already tapped a partially oversold condition that may take an extended period for both indicator lines to bottom out.” – TraderStef, April 2023
Gold Spot weekly chart as of Jul. 13, 2023 at 4pm ET…
Excerpt from the Apr. 30, 2023 weekly (thread) gold chart analysis:
“There is very little resistance left between $1,980 and the all-time high zone between $2,070 and $2,075 at the Broadening Right-Angled Descending Pattern’s topside trendline… All the Exponential Moving Averages (EMAs) remain lined up in a bullish trend.”
Excerpt from the Jun. 9, 2023 weekly (thread) 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 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 bullish and extended 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. The only economic report schedule for release tomorrow (Friday) is consumer sentiment, which is unlikely to have a significant impact on the markets.
The DMI-ADX appears to be entering another power trend setup, StochRSI is attempting a rally out of an oversold condition, Momentum, Money Flow, and the CCI bottomed out and are trying to turn upward, and Volume is steady but unremarkable. If Momentum and Money Flow increase while working through overhead resistance, the price action will likely challenge the all-time highs this summer. The chart is bullish, but caution is warranted until the $2,070s all-time-high zone is left in the dust.
Silver Spot weekly chart as of Jun. 13, 2023 at 4pm ET…
Excerpt from the Apr. 30, 2023 weekly (thread) silver chart analysis:
“Silver breached the Descending Broadening Wedge’s topside trendline during the first week of April… Last week’s candle closed as a Long-Legged Doji that’s indecisive for the near-term… The EMAs are still lined up in a bullish trend, but Volume remains unremarkable.”
Excerpt from the Jun. 9, 2023 weekly (thread) silver chart analysis:
“An Up Channel formed that’s in a second wave and printing higher lows and highs since last fall’s low. 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. The chart is bullish, but I remain cautious until resistance at $26 and $27 are breached, and $29 & $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 within an Up Channel. This week’s rally blasted through the remaining overhead EMAs, the Falling Wedge’s topside trendline, and was trading at $24.84 at 4pm ET today. The next resistance is around the 23.6% Fibonacci level that is just shy of $26, and then $27.
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 increases, silver is likely to rally with gold this summer and challenge $29 and $30.
Col. Douglas Macgregor’s outlook on Ukraine war, U.S. economy, and 2024 election (timestamp 1:52:55 to 1:56:32) – PBD, Jun. 30
Gundlach on June’s FOMC, Economy, Recession, Stocks Market, Gold – CNBC, Jun. 16
Plan Your Trade, Trade Your Plan
TraderStef on Twitter, Gettr / Website: TraderStef.com
Headline Collage Art by TraderStef
