I’m leaving tomorrow for a 2-day trip. Internet access and email will be limited. There will be no Thursday report. I return Friday and will update Plus and Premium members before the close.
Gold futures slipped to a low of $1446.20 before prices began to bounce. Gold is back up to $1457 as I write.
Today’s dip to fresh lows sent the Gold Cycle Indicator (GCI) into the minimum bottoming territory. As a reminder, reaching minimum bottoming doesn’t imply an immediate bottom in metals and miners. It merely suggests gold has corrected long enough and deep enough to meet the minimum requirements for a 6-Month low.
Could gold go lower? Of course – my preferred target remains $1380 – $1420 by late November to early December. But unfortunately, prices don’t always reach my preferred target.
Picking The Bottom
Picking the exact bottom of a 6-month low is difficult. Sometimes I see it – sometimes I don’t. The metals markets are tricky and frequently manipulated. Over the years, I’ve adopted a “close enough” approach. Meaning, when the GCI dips below 100, I begin adding to my long-term portfolio. Every week I make a deposit into my trading account, I continue to add to my portfolio as long as the GCI stays below 100. If it drops below 50 (maximum bottoming), I double my weekly deposit.
Concerning trades for the 6-month cycle, I try to be a bit more precise with my timing. I usually enter positions in tranches or will wait for sufficient evidence of a low before jumping in.
With that said, I think gold has further to drop, but I can’t be sure. With the GCI now below 100, I began adding again to my personal metals portfolio.
-GOLD- Prices reached a low of $1446.20. After four consecutive down days, gold may be ready for an interim bounce. My preferred target remains between $1380 and $1420.
-SILVER- Prices are inching closer to the 200-day MA (currently $16.13). I think we are “close enough,” and long-term investors can consider adding to their holdings. My preferred target for the 6-month low ranges between $15.20 – $16.20.
-GDX- Miners slipped below the $26.00 level briefly but reversed with gold at 10:30 AM. Prices may be getting ready to bounce.
-GDXJ- Still no sign of panic selling. We were close to a breakdown today, but gold turned higher at 10:30 AM and brought miners with it.
-CDE- Prices closed above the upper megaphone boundary, and this is beginning to look like a breakout. A big-volume move above $7.00 would confirm. Unfortunately, the right shoulder target near $3.70 is becoming unlikely unless prices reverse quickly lower.
-HL- Like CDE, Hecla Mining is near fresh highs as gold and silver are reaching new lows – very odd. Progressive closes above $2.65 would support a breakout.
-SPY- As long as trade negotiations with China progress, I think stocks will continue to trend higher. Prices would have to break decisively below 300 to support a failed breakout.
-WTIC- Oil remains a trendless mess. It would take a sustained move above $60.00 to support a trending move higher.
Have a great night.
I’ll be back on Friday.