There will be no Thursday report due to Thanksgiving.
Markets close at 1:00 PM on Friday.
TUESDAY GOLD FORECAST NOVEMBER 23, 2021
I see the potential for increased volatility surrounding tomorrow’s economic reports. The FOMC minutes come out at 2 PM.
According to Public Health England, ages 40 to 80 are on average 40% more likely to contract Covid-19 than the unvaccinated. Granted, this is just a snapshot of weeks 33 to 36 of the pandemic, but it makes you wonder…why force vaccines on citizens if they don’t slow or stop transmission?
Note: The same data shows vaccines have proven effective against hospitalizations and death, just not transmission.
If you haven’t had a chance, check out the 60-minutes special on the Supply Chain Crisis. It paints a potentially grim picture for the Holidays. Small suppliers are struggling to get inventory. If this is their time of year to turn a profit (black Friday), how will they fare if they have nothing to sell?
With used autos at record prices, housing unaffordable for new buyers, and inflation at 30-year highs – no wonder sentiment is tanking. In the chart below, sentiment dipped below the 2020 pandemic bottom and is near a 10-year low.
If you told me annual CPI was at 6.2% and the 10-year Treasury was yielding just 1.65%, I’d call an ambulance…for you are clearly having a medical emergency.
It makes zero sense. How can 10-year paper be paying -4.55% below inflation, and gold is not soaring? Mind you, “real inflation” is probably double the government’s watered-down version, so that makes it even more outrageous. When will the markets wake up?
- With real returns deeply negative, gold should be trading at new all-time highs, in my opinion.
- Because it is not, prices may be setting up a tremendous snapback rally out of the upcoming low.
- As social tensions rise over mandates, consumer shortages, and through the roof inflation – gold should once again begin to shine.
The Gold Cycle Indicator finished at 47; we are back within maximum bottoming.
-GOLD- Gold peaked in mid-November, forming what appears to be a triangle pattern. Cycle-wise, I’m expecting a bottom between now and the first week of December. It feels like we are one news event away from a sharp reversal higher. Prices would have to break below $1720 to represent something more bearish.
Below is the cycle update released to Premium members this morning:
Biden kept Powell in charge of the Fed, and gold prices are correcting into a 4-month low (pink arrows). The shorter 36-day cycle (light blue) is also due around now. With gold prices already below $1800, it looks like prices may come down to test the lower triangle boundary near $1740. Given this scenario, I suspect gold will bottom between now and next Friday’s employment report.
Note: We had a similar dual-cycle in late November last year. Provided accelerating inflation data, I suspect gold will break upward from the triangle pattern in late December or early January 2022.
-SILVER- Silver prices reversed lower after testing the 200-day MA. With all the craziness in inflation, I don’t understand why silver prices are soaring. It would take a breakdown below the September $21.41 low to recommend more downside. Otherwise, I’m expecting a bottom between now and next Friday.
-PLATINUM- We had a meltdown in platinum today as prices fell 5.01% and closed below $1000. The chart looks pretty bearish with the way prices reversed at the 200-day MA. Downside follow-through below $900 would be bearish and would open the door for a retest of support surrounding $775.
-GDX- Gold miners are pulling back and should find support around $31.00. This time last year, gold miners bottomed a couple of days before the metals, showing relative strength. I’d like to see similar behavior this time.
-GDXJ- Juniors held up relatively well, closing down just 2.05%. I’d like to see them maintain relative strength during this pullback. The next level of support arrives around $42.00.
-SILJ- I’d like to see silver juniors maintain relative strength during this intermediate degree pullback. Today, they were down just 1.63% versus spot silvers 3.55% – not a bad start.
-SPY- Stocks closed slightly higher after yesterday’s volatility. With Powell steering the ship, I think prices will continue to trend higher.
-IWM- The Russell 2000 has fallen back to the breakout level near 230. Prices need to hold and turn higher to maintain near-term momentum. Progressive closes back below 230 would support a false breakout and reversal lower.
-WTIC- Oil formed a swing low after testing support near $75.00, supporting a potential bottom. Upside follow-through above $80.00 would recommend a run to fresh highs. I continue to believe prices could test $100 or more in Q1 2022.
-BITCOIN- Bitcoin is consolidating just above the $56,000 level. Near-term, prices need to break above $62,000 and then above $70,000 in December to support new all-time highs.
A continued breakdown below $56,000 would open the door for a retest of $48,000, with final support arriving at $40,000.
Have a great Holiday!