Gold Prices Topped Again…Will It Crash To $1,000?

With more evidence arriving this week, it has become a near certainty that both gold and silver prices have topped in their Biannual Cycles and will head lower into the summer of 2015. The gold price peaked in the ninth week of its biannual cycle. With the majority of intermediate cycles lasting 20 plus weeks in duration, we must ask how low the price will go over the next 1-3 months. Will prices slowly grind lower into a mid-summer low or will it crash significantly? Unfortunately, cycles only tell us when to look for a low, and we must rely on technical analysis to determine price. If prices were to crash, I see major support around the $1,040-$1,000 level, so I doubt we would currently drop much below those price levels.

Gold Weekly Chart

Gold prices closed for a second week consecutively below the 10-week moving average, confirming a Biannual cycle high at $1,232.00. We should now head lower into mid-summer with an occasional bounce higher. Like I said if the price does accelerate downward I imagine the incredible support at $1,000 holding (for now).

Gold Daily Chart

The gold price managed a decent reversal on Friday and has set itself up to make a confirmed swing low. If prices bounces higher from here I don’t see it making it past the 200-day average and that bounce should exhaust on or before the Fed meeting June 16/17.

Silver Weekly Chart

Silver prices closed below the 10-week moving average indicating that $17.77 is indeed the Biannual cycle high. As with gold, the question now is how low the price will drop before bottoming later this summer.

Silver Daily Chart

Prices also reversed some most of the losses Friday and is setting up to make a common cycle low, the 200-day should contain any push higher.

GDX Daily Chart

Looks ready for a bounce higher possibly to the 200-day moving average, let’s see if we get it.

In summary gold and silver prices have likely topped in their respective Biannual cycles and will head lower into the summer. We expect a bounce higher over the next week or two that will fail to make new highs and potentially become a temporary shorting opportunity. We are ultimately BULLISH on precious metals but until the MAJOR cycle bottoms (between now and Q4 of 2016) traders must remain nimble.

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