2020 Gold forecast, Silver, Gold/Silver Ratio, 27 Febr

GOLD FORECAST 2020 – SILVER – GOLD/SILVER RATIO 27 Febr


Gold Price Forecast relative to
Long Term Monthly (LT-M)
Medium Term Weekly (MT-W)
Short Term Daily (ST-D)
and Hourly (not shown) data
(Previous week in brackets)


Gold/USD LT-M MT-W ST-D
1645 (1583)
Trend ↑ (↑) ↑ (↑) ↓ (↑)
% Risk
Weight
88 (90) 85 (80) 67 (60)
Allocation 100% (100%)

Gold/USD live price


Having skipped comment for nearly 2 weeks nothing really has changed. Gold did get overbought ST after rallying 100 dollars in a matter of 6 days peaking at 1689 on 24 Febr. This was indeed text book Elliott and our Gold price forecast has been spot on. Our long term position is now firmly established with strong horizontal support around the 1550 level which is the low of the January consolidation pattern. The long term move should at least start to show one or more bearish divergence indications in the Monthly time frame with probably a couple or more bullish divergences between shorter and longer term time frames. This could drive this market substantially higher over the medium term where both CHF and USD are likely to reach new lows vs Gold meaning Gold making new all time highs against USD and CHF just like it made new all time highs against all other fiat currencies on planet earth. No Change. We will update as further news unfolds in the Gold market.

Last week: If we observe Gold/USD from the 16 Aug 2018 low to-date the advance is probably textbook Elliot wave. Generally very few Elliott Wave masters get it right, yet using a preferred wave count together with the best next alternative can be very helpful if that count could confirm a possible end of advance or correction and thus may or may not confirm our risk analysis. As risk weight in this market is becoming high and not finished because we should now first expect bearish risk weight to price divergence in the MTR or Long term time frames, let’s look at a possible Elliott wave count. Doing this we do not look at third party Elliott wave counts as they differ quite a bit if publicly accessible and we do not subscribe to any of the established firms. Our wave count would now put either near or at the start of a 5 of 1 of 5 or at or near the the start of 5 of 1 of 3. Either way this market has not reached a long term top according to our possible EW counts. Because risk weight advance has not yet finished in any of our time frames, price could still surprise on the upside and with a 20% cushion Our Elliott wave count confirms our risk weight approach to remaining fully invested


Weekly Silver Price Risk Analysis Forecast

(Previous week in brackets)

Silver/USD LT-M MT-W ST-D
17.75 (17.71)
Trend ↑ (↑) ↑ (↓) ↓ (↑)
% Risk
Weight
66 (66) 60 (56) 40 (27)
Allocation 100% (100%)

Silver/USD live price


Silver, since the Corona rally started on Febr 13, made its strong move alongside gold and topping out near 19.00 on 24 Febr. This more industry driven metal subsequently dropped much sharper taking the ratio back above 90. This does not hurt being long as the position cushion is still significant at 15% whilst the chart does still signal the same relatively strong features. The most likely scenario from experience is that Silver will first drive an intermediate bearish divergence in the MT Weekly timeframe. At what price level that divergence will materialize is impossible to say but guidance would be somewhere around the 2016 peak near 22.00. If that level breaks coulds in the sky won’t appear till above 35.00. This is the most likely scenario irrespective of hard to measure the effect of fundamentals that drive short term emotion. Silver frankly is dirt cheap and, all things being equal, offers the opportunity of a life time. It already did that back in 2014, but even at 18.00 the opportunity to use silver as insurance against the unknown must be regarded as substantial. No Change.

Last week: Silver of course offers a different Elliottt wave count yet with a similar confirmation principle in that the present wave count and best alternative are at a much earlier stage of the Elliott wave Long and Intermediate degrees. This would nicely fit our risk analysis where risk weight is lowe than gold. Hence, silver should be regarded and closely monitored as a key asset in any larger portfolio distribution. No Change


Weekly Gold/Silver Ratio Price Risk Analysis Forecast

(Previous week in brackets)

GOLD/SILVER Ratio LT-M MT-W ST-D
92.55 (88.49)
Trend ↑ (↑) ↑ (↑) ↑ (↓)
% Risk
Weight
57 (52) 85 (74) 85 (78)
Allocation 50/50 AU/AG (50/50 AU/AG)

Gold/Silver Ratio live price


The rally of precious metals into the short term peak last week put pressure on the ratio bottm,ingh at 87.35 on20 febr followed by a strong rally into the 92 handle. The picture is very similar to that of equity indices and many individual stocks. This ratio should be approached no different from what we have done. We remain in slighth overweight on Silver in the metals space and stay wth a full allocation to Gold and Silver, hence the formal 50/50 risk allocation.

Our comments for Gold and Silver continue to extend to the ratio. As this market currently goes against our trend call and expectation we see NO risk weight level that gives reason to change our mind and at the same time we cannot get a clear signal that a top is imminent. The picture however in the LT Monthly time frame is weak, even with an uptrend present right now. If we do an Elliott wave count, the ratio appears to be making a double ABC upward correction in a minuette type degree since the Sept 2019 low. This gives comfort to remaining fully invested in Silver with slight underweight of the yellow metal


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