GOLD
Weakening from resistance at $1800.
Short-term price activity is weakening from resistance at 1800. This may start to weigh on constructive recovery that we have seen over the last few
weeks, following Gold’s dramatic 20% capitulation.
Speculative (net long) flows remain a concern having recently breached a key downside level which may threaten over 2 years of sizeable long gold positions.
There is heightened risk for a much larger decline if we confirm a weekly close beneath $1600 and $1592-30 (200-day MA/swing low), which has not been breached in 3 years!
A number of “bargain hunting” trend-followers will be watching this benchmark “line in the sand” for repeat support or a potential big squeeze lower into $1300 and perhaps even $1040-1000. Remember, this would still offer a unique buying opportunity in the near future.
SILVER
Weakening into key support at $26.0700.
Silver is weakening back into its previous swing low at 26.0700. Macro price structure continues to focus on the downside risks, following the major selloff
in September.
Such a dramatic move traditionally produces volatile trading ranges. This allows the market to have enough time to recover and accumulate renewed buying interest.
Expect a large trading range to hold between $37.0000-26.0700 over the multi-week/month horizon, with downside macro risk into $21.5165 (61.8% Fib-1999 bull market) and $20.0000. This would still maintain silver’s longterm uptrend and help offer a potential buying opportunity for the eventual resumption higher.
Continue to watch the gold-silver “mint” ratio which has now accelerated higher by 67%, suggesting further risk aversion over the next few weeks.