Gold Price & Silver Price Will Head Lower Until Summer

Senior Technical Analyst
May 28, 2015

It is becoming more and more likely that both the Biannual Cycles for Gold and Silver have topped. I’m increasing the likelihood of a top to 90% at this time and will begin looking down instead of up. Once we have the final confirmations of a phase 4 beginning our focus will shift to how low the price may go before finally bottoming out this summer.

US DOLLAR

The Dollar is moving firmly out if the cycle low and take a breather sooner or later. I imagine commodities will get a bounce higher when that happens.

 

GOLD PRICE DAILY

The common cycle is on day sixteen and will likely form a temporary bottom in the next few trading days.  I expect the price to bounce higher out of that low and ultimately fail to make a higher high above $1,232.

SILVER PRICE DAILY

Price broke lower out of the small bear flag as expected, and we should get a common cycle low soon, it too will fail to make a higher high before rolling over.

GDX DAILY

Price gapped down through trend line in a very bearish manner. We will likely get a bounce whenever that will close the gap and test the underside of the blue trend line. A false rally may even take the price to the 200-day or even the 20.50 level gap level. Once the bounce is over we will be looking to short the metals and miners until the summer Biannual Cycle Lows.

Premium subscribers, I’m looking for quality chart setups, but haven’t been able to find any good risk/reward ratios. I like the oil and gas stocks once they finish correcting. Here is a MONTHLY chart of HERO revealing a Bullish Morningstar pattern, similar to the pattern that ended the 2009 crash.

HERO DAILY

The daily chart is approaching the right shoulder target box we have drawn, if price continues to correct past the target box the underlying structure may evolve into a triangle pattern, similar to several other oil stocks.

We will be watching closely over the next couple weeks as Gold and Silver have likely topped.

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Pierce Wellington is the Senior Technical Analyst and a head trading consultant. After making unwise decisions early in his trading career, he developed a passion for Education, Technical Analysis and Trading Discipline. He has successfully traded the Gold and Silver markets for over a decade and is a Chartered Market Technician (CMT).


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