Bottom in Gold & Silver
David Brady

Bottom in Gold & Silver Prices: What's Next?

Despite the slightly higher than expected CPI numbers across the board, a rate cut of 25 bp on Nov. 7 has a probability of 84-87%, a virtual certainty according to interest rate futures.

However, TLT is extreme oversold on its daily chart, and the 1-hour chart below shows a clear positive divergence at a lower low in price. TLT 

Impact of TLT Rebound on 10-Year Yields and Gold

If TLT does rebound, that means lower 10Y yields ahead, and that is typically negative for the DXY.  

Is the US Dollar Index (DXY) Peaking?

The DXY may have already peaked at a negatively divergent higher high at 103.10. If the DXY continues south, that’s typically bullish for Gold and Silver. If DXY breaks 100, or even better, 99.50, then the move down to 94-92 has truly begun. This would support a move up to $3000 in Gold and perhaps as much as $40 in Silver. 

Gold Price Prediction: $3000 Target in Sight?

Meanwhile, Gold is trying to break back above former support, now resistance, at ~$2650. Once through there, I’m looking for at least $2750 next. Support is at $2620-$2600. 

Silver Price Forecast: Can Silver Break $40?

Silver is having trouble getting above $31.25 as I type. But once through there, I’m looking for a new higher high above $33.23, around $35-$36. Support remains at $30. A break below there and all bets are off. Simply put, the stars are aligning for higher highs in the metals and miners alongside lower bond yields and a lower DXY. Only a break of $2600 in Gold and $30 in Silver negate this in the short term.

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David Brady has worked for major banks and corporate multinationals in Europe and the U.S. He has close to thirty years of experience managing multi-billion dollar portfolios including foreign currency, cash, bonds, equities, and commodities. David is also a CFA charter holder since 2004.

Using his extensive experience, he developed his own process utilizing multiple tools such as fundamental analysis, inter-market analysis, positioning, Elliott Wave Theory, sentiment, classical technical analysis, and trends. This approach has improved his forecasting capability, especially when they all point in the same direction.

His track record in forecasting Gold and Silver prices since has made him one of the top analysts in the precious metals sector, widely followed on Twitter and a regular contributor to the Sprott Money Blog.

 

www.sprottmoney.com