Gold, Silver Ready For Another Rally Attempt
Chris Vermeulen | Oct 12, 2020 12:41AM ET
After nearly three weeks of sideways/downward price action in Gold and Silver, our researchers believe both metals have already set up another breakout/rally attempt after breaching downward resistance (shown as the downward sloping CYAN line). This could be another huge opportunity for precious metals traders as the next move higher should prompt a rally above recent highs. That means a target price level in Gold above $2100 and a target price level in Silver above $30.50.h3 ARE METALS POISED TO RALLY TO NEW HIGHS SOON?/h3
The deep price retracements recently in both Gold and Silver have come from news events. First, the EU Banking Report that destroyed the market on September 21. Then, just recently, the news that President Trump contracted COVID-19. The resilience in both Gold and Silver near these recent lows suggests demand for metals is still skyrocketing—otherwise, we believe much deeper price lows would have been reached.
If our previous research is correct, this current basing/bottoming pattern could be the beginning of an explosive upside “appreciation” phase in precious metals.
h3 GOLD DAILY CHART/h3We expect Gold to rally to levels near 1995, then stall a bit before breaking clear of the $2085 level and pushing well above the $2150 as a new rally phase begins. At this point, we believe the upside move to break the CYAN resistance channel is key to starting this upside price recovery.
The setup in Silver is very similar and, in many ways, a bit clearer on the chart. The CYAN downward sloping price channel is very clear.
Price is very close to breaking above this channel. We believe the next move in Silver is a rally to levels near $28, then stalling briefly before the next “appreciation” phase begins pushing Silver above $31.50.
Remember, what we are calling the “appreciation phase” is really a much longer-term price appreciation cycle in metals that should begin within the next six months and may last 2+ years.
When we are reviewing Daily charts, as we are in this article, we are talking about an appreciation phase that may last 7 to 15 days – not two years. Still, the result is that we believe Gold and Silver are ready to start moving much higher at this point – we need to see those CYAN levels broken first.
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