Gold: Quick Geocosmic Update

Geocosmic Reading:

Gold: A 2-star CRD(Crucial Reversal Date) is now in effect Saturn is stationary too, which means any market declining is a candidate for a cycle low in the next week. Gold is in a time band for a primary cycle and prices are declining, so the idea is to look for signs that low is forming here (buy signal). especially Moon in Taurus this Thurs—Fri because it is a solar-lunar reversal combo too, with high score for a low.

Gold – Trump’s possible victory: profit-taking in the market ??

 Since breaking out above 2,530 US dollars at the end of August, the price of gold has only known one way up. After a stormy rise, a new all-time high of 2,790 US dollars was reached yesterday, Wednesday. A major consolidation or even a real correction has so far been absent.

The increased volatility has only resulted in two sharp, but overall very manageable, setbacks. Instead, gold bulls are storming from one new all-time high to the next.

Overall, the rally on the gold market has been going on since autumn 2022. The triple low at 1,615 US dollars marked the trend reversal at that time. However, the upward movement has only gained significant momentum in the last twelve and a half months. Starting at 1,810 US dollars, the gold price completed its summer correction on October 5, 2023.

Since then, there has been an impressive increase of over +54%.

In particular, the geopolitical escalation in the Middle East since the Hamas invasion has been one of the main drivers. Of course, the ongoing drama in Ukraine as well as strong physical demand from Asia and the BRICS' ongoing move away from the US dollar also played a decisive role.

Accordingly, it can certainly be argued that the significantly increased price of gold includes a certain “war premium”.
Gold in US dollars on the night of the US election in 2016, weekly chart from October 31, 2024.

If Donald Trump wins the 2024 US presidential election, there are strong indications that he would pursue a de-escalation strategy for both the Ukraine conflict and tensions in the Middle East. Regarding Ukraine, Trump's advisers are outlining a model of a "frozen conflict" with autonomous regions and a demilitarized zone, with Ukraine remaining outside NATO.

Trump himself criticizes the current situation and emphasizes that any deal, even a bad one, would be better than the current situation. A similar approach can be assumed for the Middle East, with Trump likely relying on his supposed skills as a deal-maker to defuse the conflicts through negotiations and economic pressure rather than relying on military solutions.

Whether Donald Trump will actually bring about a de-escalation remains to be seen.

We are currently particularly interested in whether the markets might start to price in a de-escalation in the future. This could actually lead to profit-taking in the overheated gold market.

Even Mr Trump will not be able to solve the problem of dramatic US debt, but his election victory could well trigger a setback in precious metal prices lasting several weeks, similar to what happened in 2016.

At that time, his surprise victory on election night initially caused a sharp spike to almost 1,340 US dollars. But the very next morning, the price of gold collapsed and collapsed in the following six weeks to 1,122 US dollars (-16.6%).

Accordingly, we would be somewhat cautious in the short term. According to a Bloomberg survey, over two-thirds of the experts surveyed recommend gold as a hedge against the uncertainties of a Trump presidency. As convinced counter-cyclicals, we are alert to such expectations and suspect the opposite, because the potential surprise lies in a falling gold price. In the medium and long term, however, Trump's announced economic policy, particularly with regard to tariffs, tax cuts and trade wars, could weaken the US dollar and fuel inflation again. This should then make the gold price even more attractive.


Gold in US $ – target of 2,800 $ almost reached..

Gold in US dollars, daily chart from October 31, 2024. 

On its daily chart, the gold price has been showing an almost straight upward trend for months. And even in the few consolidations lasting several weeks, the bears had little to laugh about. A break in the established upward trend would only be possible if the gold price fell below 2,560 US dollars. However, in the wake of increased volatility and possible profit-taking, one or two support zones could well be tested in the coming weeks. There is a very strong support zone in the area of ​​2,600 US dollars in particular.
However, the daily stochastics are still running like clockwork in a bullish embedded state and are securing the upward momentum for now. A bigger slap from the bears is definitely needed to break up this extremely bullish structure.

For now, the technical probabilities suggest that the rally will continue.

However, many leveraged speculators are sitting on extraordinarily high profits, which could be realized at any time on the paper gold market with the click of a mouse. Regardless of the fundamental conditions, a well-known waterfall-like sell-off could be triggered, particularly due to the heavily overbought situation.
With a little patience and a solid liquidity position, there might be another good buying opportunity on the money market by mid-December, because the overall upward trend is intact and gold has not yet reached all of its price targets.

Trump’s possible victory: profit-taking in the gold market??

The price of gold has been on an impressive upward trend for months, driven by geopolitical tensions, strong physical demand from Asia and the BRICS countries' increasing move away from the US dollar. It was only in the spring that Western investors began to return to the precious metals sector, although both the price of silver and mining stocks still have a lot of catching up to do.

The factors mentioned have led to a certain "war premium" in the price of gold and pushed it to new all-time highs.

Despite the overbought market situation and the possibility of short-term corrections, especially in view of the upcoming US presidential elections, the overall uptrend remains intact.
However, a possible election victory for Donald Trump could initially lead to profit-taking and a short-term correction in the gold market, similar to what happened in 2016. In the long term, however, Trump's economic policy approaches, such as tariffs and tax cuts, could weaken the US dollar and fuel inflation, which in turn would support the gold price. Investors should therefore remain vigilant and consider possible corrections as buying opportunities, as the gold market has not yet reached all of its price targets and the fundamental drivers for a higher gold price still exist.

Our price target of "approx. 2,745 to 2,800 US dollars" was more or less met at 2,790 US dollars. We see the price of gold continuing to rise to at least 3,080 to 3,100 US dollars by next spring 2025. A possible setback to the range of around 2,600 to 2,625 US dollars could therefore provide another worthwhile entry in the coming weeks.

Gold Geocosmic Reading Gold 3000 Ahead?

3000 is a possibility in this Gold breakout, especially as long as resistance-turned support at 2694-2709 holds and this is a new primary cycle after that 90.00 break from 2708-2618 Sep 27-Oct 10. Solar-lunar air-air did not produce sharp sell off this week, which is another sign bull run is still on.

Pullback early this week in Gold and Silver after last week’s breakout to new highs? This week begins with the last air-air solar lunar combination of the Libra season. 

There is usually at least one of these 3-4 combos correlating with a sharp but brief sell-off (Which we have seen Yesterday) when the Sun is  in an air sign, and the previous lunar air signs did not produce that sharp of a sell off so far. 

Yesterday's selloff held the breakout of former resistance (now turned support) at 2694-2709 in Gold? If this is a new primary cycle and breakout, new highs are still ahead and any decline into this support zone represent buying opportunities with reasonable stop losses based on risk tolerance. 

Opportunity is that higher prices still likely within next 1-3 weeks. Danger is that once high is in, 50-week cycle low time band also still in effect thru December and especially by late Nov.

You can make a trading plan with these timing factors in mind.

And yes, it’s possible 50-week cycle skips a beat this time. That happens with 15-20% frequency. Our strategies, however, are based on historical frequencies of 80% or more. 

Would be nice if any studies were 100% as novice traders and analysts would like to believe of their work. But markets have a way of teaching humility and the need for emotional detachment thru experience on the path to becoming a successful trader or analyst. In other words, if you miss one by following your plan, don’t take it personally. If you start missing more than you hit, your plan isn’t working and you need to re-evaluate that plan.

Turbo rally in silver: rise to record level

Shortly before the end of the week, the silver bulls are attempting to reach the resistance zone of 32.50 US dollars for the third time in four weeks. They had previously failed quite clearly at this level in May. In retrospect, however, the subsequent setback to 26.40 US dollars only cleared up the overbought situation and ultimately gave the silver bulls new strength.

Accordingly, the attacks are now becoming faster and more intense. A breakout above the resistance level of around 32.50 US dollars is within reach and should result in a rapid price increase to around 35 US dollars. In addition, there are further price targets between around 37.50 and 40.00 US dollars and of course around the all-time high of around 50 US dollars. We believe a breakthrough to the all-time highs in the coming months is possible and realistic.

Silver with great catch-up potential

Although the price of silver continues to lag clearly behind the price of gold in the bigger picture, it has nevertheless been able to keep up with the spectacular development on the gold market, at least since the beginning of the year .

Overall, both precious metals have seen a price increase of around 35%. However, as always, silver shows greater volatility.

At the same time, the gold/silver ratio is above the 10-year average at 84:1. A real trend reversal in favor of silver would probably only occur once the upward trend line that has existed since 2011 in the area of ​​around 74 has been clearly broken downwards.

As always,  Silver will probably only turn on the turbo on the home stretch and then schizophrenically but also elegantly at the overtake the gold price in a schizophrenic but also elegant manner .

This typical behavior at the end of a rally in the precious metals sector has not yet been observed. Therefore, there is a good chance that the party could continue at least until the end of the year, and probably even into next spring. In the short term, the US election could perhaps bring about some profit-taking and thus a breather .

However, industrial silver demand from Asia (solar & batteries) remains a key driver of prices, particularly due to the increase in solar demand, which now accounts for around 15% of total demand.

Buyers in Shanghai are also still willing to pay a premium of around 6 percent for physical silver.

With mine supply stagnating or even declining in some areas, the slowly increasing investment demand in the West could further increase the deficit in the silver market. Currently, the holdings of exchange-traded silver funds are around 30% below their 2020 peak. But nothing attracts new investors more than rising prices!

After a daily high of 32.61 US dollars, the price of silver is now aiming for the highest weekly closing price since December 2012, once again attacking the resistance zone of 32.50 US dollars. The breakout or liberation is within reach.

Chart-wise, the uptrend is intact and the breakout from the ascending triangle of the last few weeks is underway. Fortunately, the daily stochastics supports this bullish starting position .

The oscillator also still has plenty of room to reach its overbought zone. On the downside, the rapidly rising 50-day line (30.15 US dollars) should absorb any setback and subsequently catapult prices further north.

Overall, the starting position is extremely bullish and a rise to 35 US dollars is probably imminent. In addition, the breakout should be able to push silver prices up to a level of at least 50 US dollars in the coming weeks and months.

Conclusion: 

Silver - The Turbo Booster is coming

The silver market is likely on the verge of a crucial turning point that could trigger a significant upward price increase . The expansionary monetary policy of central banks and rising geopolitical tensions have led to an increasing scarcity of raw materials, especially silver, which is indispensable in numerous technologies.

The latest Futures Market Report (CoT) shows that the amount of silver futures contracts sold on the Comex exceeds more than a year of supply, indicating an impending run on physical silver. This dynamic could drive the silver price further higher and initiate a massive bull market in the silver market, similar to developments in 2010, 2016 and 2020.

Gold – Between volatility and doldrums

Since mid-April, the price of gold has struggled to continue its upward trend and develop new, sustainable upward momentum. Nevertheless, it reached a new all-time high of $2,483 on July 17. However, the price then fell sharply by $130 within a week, only to quickly recover to $2,378.

At the beginning of this trading week, as expected, precious metal prices were unable to escape the sell-off on the financial markets. With a panic low of 2,363 US dollars, the price of gold was briefly traded in a sideways range between 2,300 and 2,400 US dollars. In the meantime, however, prices have already recovered to over 2,428 US dollars.

Gold with tumbler qualities.

Despite the slightly higher highs, the overall situation remains the rather opaque and sometimes turbulent ups and downs that have characterized the gold market since mid-April.

What is impressive, however, is the resilience of the gold price!

Despite the sometimes brutal sell-off attacks, the price of gold always recovers within a few days and persistently pushes itself back up again. These are resilient qualities that should not be underestimated. At the same time, however, the divergences and thus the potential reversal signals continue to increase and are causing a certain amount of skepticism, at least over the next one to three months.

Sell ​​in May and go away, but remember to come back in Self ember

In accordance with the old stock market rule "Sell in May", we have repeatedly called for the summer months to be approached with an increased liquidity ratio in recent months. The foreseeable crash on the financial markets wiped out a market capitalization of 1.3 trillion US dollars in just three days for the so-called "Magnificent Seven" stocks alone (NVIDIA, Apple, Microsoft, Alphabet, Amazon, Tesla and Meta Platforms) and at the same time pushed the DAX down by around 1,500 points. Margin calls also caused a temporary bloodbath in precious metals, from which the gold price in particular quickly recovered.

In the global financial casino, all market sectors are closely correlates

There is no doubt that money flow and liquidity in financial markets have a significant impact on market stability and price formation. Liquidity describes the ability of a market or an asset to be converted into money or currency quickly and without major losses.

A liquid market has enough buyers and sellers to enable trading activities at a fair price, which is especially important in volatile times as it allows investors to react flexibly to market changes and minimize losses.

However, since central banks around the world have been constantly expanding the money supply in the entire banking system for over two decades with extremely low interest rates and monetary policy measures such as "quantitative easing", all sectors in the global financial casino are now closely correlated with one another.

In addition, large speculators such as hedge funds are aggressive and leveraged across all sectors in their search for returns. In emergency and panic situations, so-called " circuit breakers " stop trading on a stock exchange, which further restricts the free market mechanisms and further reduces the already distorted price discovery to absurdity.

Circuit breakers work automatically by stopping trading when prices on stock exchanges and for individual securities reach predefined thresholds.

An ounce remains an ounce

In this respect, the sharp drop in gold and silver prices on Monday was no surprise, but a familiar pattern that has been observed in almost every market crash over the past 25 years. However, anyone who physically purchases precious metals and stores them outside the banking system can view the volatile fluctuations in the markets with confidence. After all, precious metals only fully demonstrate their proven safe haven properties over thousands of years when they are stored outside the highly leveraged and inflated fiat money system.

An ounce of gold remains an ounce of gold, regardless of whether it costs 2,300 or 2,000$!

Gold price in US dollars – consolidation triangle

Four weeks ago, we had given a somewhat lower probability of further rising gold prices and rather anticipated the end of the rally in the area of ​​around 2,430 US dollars.

However, the failed assassination attempt on Donald Trump initially catapulted gold prices to a new all-time high of 2,483 US dollars. This was followed by two sharp sell-offs and an interim recovery to 2,478 US dollars.

However, the rising 50-day line (US$2,371) absorbed the two setbacks and remains an extremely important support for the gold price.

Shortly before the end of the week, the price of gold is currently trading at 2,428 US dollars, already quite confidently above the psychological mark of 2,400 US dollars.

Based on the erratic fluctuations since mid-July, a potential consolidation triangle could develop in the coming weeks. In this triangle, the gold price could initially remain trapped or settle somewhat between approximately $2,385/2,400 on the downside and approximately $2,455/2,470 on the upside.

In addition, the two Bollinger bands are moving sideways between 2,472 US dollars and 2,359 US dollars, also indicating a sideways trading range. After the wild ups and downs of the last four weeks, the gold market would certainly benefit from some calm and at the same time would mean the typical summer lull.

Summary: Gold – Between volatility and doldrums

After the panic at the beginning of the week, a somewhat calmer market phase is to be expected until the central bankers' meeting in Jackson Hole on August 22nd or until the beginning of September. However, the stock markets could be in for another hot ride in September and October or until the US election on November 5th.

In view of the solid supports at around 2,280 to 2,300 US dollars and around 2,350 to 2,370 US dollars, the trend in the gold market remains clearly upward.

At the same time, the situation within the consolidation triangle is likely to calm down somewhat for the time being. The geopolitical tensions in connection with the slightly weaker US dollar due to the disastrous US debt policy and the foreseeable first US interest rate cut in September are ensuring that new buyers keep coming into the gold market.

A technically healthy and seasonally typical correction has not yet occurred and is currently not foreseeable. Only below 2,280 US dollars could one speak of a change in direction. Otherwise, the confusing consolidation will remain, in which the gold price will nevertheless continue to creep higher.

August 2nd, 2024, Gold – Only a short-lived pullback after speculative spike

Gold – Only a short-lived pullback after speculative spike

Over the past few days, the gold market has experienced significant volatility and a notable decline as well as a sharp recovery in prices. Following a gradual decline in price fluctuations since mid-April, volatility has increased significantly again in recent days. Gold – Only a short-lived pullback after speculative spike.

Review.. 

After a sluggish start to the trading year 2024, gold ended its consolidation phase in mid-February and transitioned into a strong trending phase. Initially, this led to a sustainable breakout above the multi-year resistance zone around USD 2,075. Consequently, gold prices surged further to USD 2,430 within just two months. However, the gold rally abruptly ended on April 12th with a significant price drop late on Friday afternoon. Despite further attempts, the bulls could not reclaim the USD 2,400 mark in the following week.

Instead, a tricky consolidation between approximately USD 2,300 and USD 2,400 began at a high level. Simultaneously, solid support around USD 2,280 to USD 2,300 was defended. Eventually, on Whit Monday, about five weeks later, gold temporarily broke out to a new all-time high of USD 2,450, only to quickly fall back into the sideways trading range. During this period, the support around USD 2,300 was breached several times without a sustainable downward breakthrough.

Assassination Attempt on Trump Causes a Short-Lived Spike in the Gold Market

Overall, the chart pattern gradually deteriorated as reversal signals steadily increased. On June 26th, gold fell below the psychological support at USD 2,300 once again. However, new buyers quickly entered the market, and the breach turned out to be a false signal (bull trap). Encouraged by this, gold prices surged again from the end of June to July 17th.

The failed assassination attempt on Donald Trump caused a spectacular spike to a new all-time high of USD 2,483. The joy over this new all-time high was short-lived, though, as gold made a sharp reversal and plummeted by about USD 130 to USD 2,353 within the following seven days. This brought prices back into the tough sideways range that had formed since mid-April. At the same time, an ugly reversal candle or “blow-off top” appeared on the weekly chart.

Just a week later, however, gold is back above USD 2,450 trying to reach the new all-time-high at USD 2,483. This resilient behavior is impressive and can be observed since mid of April already. Like a “Stehaufmännchen” (Stand-up man) gold is able to bounce back from any pullbacks or failures. The term “Stehaufmännchen” is German and is derived from a type of toy that always rights itself when knocked over, symbolizing the ability to recover from difficulties.

Relative Strength in Silver Was a Clear Warning Signal

Silver on the other hand, has not been following gold in recent weeks to new highs. While silver prices showed relative strength against gold in May, it recently failed to reach a new high. Instead, the annual high of USD 32.52 from May 20th was clearly missed, and a new two-and-a-half-month low of USD 27.29 was reached this Monday. Thus, silver’s relative strength in May turned out to be a clear warning signal, as suspected. The rally that began in early October 2023 is likely over, and, together with the correction in the stock-markets, silver might enter a healthy correction in the coming weeks and two to three months.

Harris’s Candidacy Heats Up the US Election Campaign and Fuels Uncertainty

Simultaneously, recent political developments in the USA have led to significant disruptions in the financial markets. Initially, the increasing likelihood of another Trump presidency triggered a rotation away from technology towards value stocks. This movement was abruptly stopped when President Biden announced his withdrawal from the election campaign, and Vice President Kamala Harris declared her candidacy. This unexpected turn of events caused great uncertainty among investors, as an intense and possibly prolonged election campaign is now expected until November 5th and possibly beyond.

As a result, nearly all market sectors came under pressure, with technology stocks being particularly affected. On Wednesday 24t of July, the Nasdaq 100 recorded its largest drop since October 2022, with a daily loss of 3.7%. Overall, over USD 1.1 trillion in market capitalization was wiped out from the US stock market in a single trading day last week. Even gold and silver prices were not able to escape this carnage. In the meantime, stock-markets have corrected further following a rather uncertain-looking press conference of the Fed this Wednesday.

Overall, it seems as if the typically correction into September and October has started in the financial system. The situation once again highlights the close interconnection between political events and short-term market reactions. Investors must brace themselves for continued high volatility in the coming months, as the US election campaign and its potential impacts on economic policy will continue to influence the markets.

Chart Analysis – Gold in US-Dollar. 

Weekly chart: Stochastic snaps with a renewed buying signal.

On the weekly chart, gold had been increasingly consolidating since mid-April. The temporary breakout to the new all-time high of USD 2,483 seemed to be a bull trap last week. This week’s large bullish candle however makes this assumption very questionable. While stock-markets most likely are sliding into a correction, gold is holding up very well so far. But to unleash new momentum gold needs to break through the psychological resistance around USD 2,500. That would also mean to jump out of the uptrend channel of the last 22 months.

Overall, the weekly chart is slightly bullish as the slow stochastic has switched back up. Despite growing negative divergences, the uptrend is still intact.

Daily chart: Stochastic buy signal has more room to the upside..

On the daily chart, last week’s price drop has led to a revisit of the 50-day moving average (USD 2,363). This moving average has barely risen since early June due to the extended sideways phase. However, prices bounced off this solid support and rallied USD 115 from there in a matter of six days.

The resulting new buy signal from the stochastic oscillator still has a lot of room to the upside and indicates that the rally has further to go. However, the user daily Bollinger Band (USD 2,477) will likely create some struggles for the bulls.

In summary, the daily chart is bullish. Support between USD 2,420 and USD 2,450 will have to hold for this rally to continue.

Conclusion: Gold – Only a short-lived pullback after speculative spike

Since October 6th, 2023, gold prices have significantly increased from USD 1,810 to USD 2,483. Although the rally was not a one-way street and was repeatedly interrupted by pullbacks and consolidations, the overall result is an impressive price increase of +37.2%. With the new all-time high at USD 2,483 and the subsequent sell-off down to USD 2,353 as well as the quick recovery towards USD 2,477, the bulls are still in control of the gold-market.

However, we have repeatedly pointed out since last year that after the successful breakout above USD 2,075 and a rally towards approx. USD 2,535, there should be a “textbook-like” pullback to the former resistance zone sooner or later. So far, gold prices have only consolidated very strongly at a high level since mid-April. The vertical final exaggeration, which typically brought the “end of the line” in the past, was missing. We believe that this behavior is now taking place with the sharp spike to USD 2,483 and the continued rally.

If this assumption is correct, the gold price might reach a few more higher highs around and slightly above USD 2,500. Ultimately the rally is about to end though and gold prices may finally start to correct as the liquidity is shrinking due to the stock-market correction.