The grinding consolidation in precious metals has been frustrating. Gold is working on a B-wave triangle that should break below $1900 within the next week or two. Our analysis remains on track for a 6-month low and subsequent buying opportunity by late September or early October.
Our Gold Cycle Indicator finished Thursday at 295. After peaking at 450 in August, it continues the descent toward cycle bottoming (green zone). The 6-month low should arrive once the value dips below 100 (currently 295).
-GOLD- Gold continues to grind out a B-wave triangle before its decline towards $1750 – $1800. Technically, prices could bounce a little higher to tag the upper triangle boundary near $1985, but it’s not a requirement. Once the triangle is complete, prices should turn lower and break sharply below the $1900 level. I think $1750 is likely.
-SILVER- Silver continues to consolidate. As with gold, I think it’s just a matter of time before prices break lower. Initial support at $22.50 and then around $19.00 if prices selloff sharply. I’m very bullish on silver long-term.
-GDX- The morning gap higher failed, once again. Prices continue to make lower highs with each rebound, which should eventually lead to a sharp break below $39.00 later this month. My ideal target for a 6-month low remains between $31.00 – $33.00.
-GDXJ- Juniors also failed to maintain its morning gap, and I continue to expect a breakdown below $54.00. Ideal target between $40.00 – $44.00.
-SPY- The attempted rebound in stocks failed to regain the 10-day EMA (341.76), and I see the potential for an accelerated decline below 330. Initial target 300 with 285 (or lower) possible if we get another panic type liquidation.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.
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