GOLD FORECAST

Gold/USD	LT-M	MT-W	ST-D
1673 (1645)
Trend	↑ (↑)	↑ (↑)	↑ (↓)
% Risk Weight	88 (88)	81 (85)	71 (67)
Allocation	100% (100%)

There are few markets showing investment quality. Precious metals is amongst those asset classes that is currently showing traditional protection. The kind that says that any portfolio should always have at least 3-10% of precious metals. We are up to 50% unleveraged with a slightlyu higher than equal silver to gold spread. Gold is up more against the USD mainly due to continued dollar weakness this past week.
Obviously the markets are on high alert due to the across nations Corona development forcing many business to tap into reserves. The Daily risk turned up folllowing price. Even though risk weight is high and potentially diverging in the MT timeframe, the cushion is significant to keep maximum protection.

Last week: 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

Silver/USD	LT-M	MT-W	ST-D
17.31 (17.75)
Trend	↓ (↑)	↓ (↑)	↑ (↓)
% Risk Weight	58 (66)	46 (60)	34 (40)
Allocation	100% (100%)

Silver suffered and against technical expectation relative to gold by losing 2% in price and 4 on the ratio the past week. Without leverage on the position, which is still in very good shape, we feel comfortable staying fully invested. The more commodity/industrial type behavior is not worrying. Of course we aren’t sure if Corona is the Black Swan event. It clearly could be. If it is and the market requires a reset of some kind, silver should do extremely well. We may even experience shortage of production. No change.

Last week: 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

GOLD/SILVER Ratio	LT-M	MT-W	ST-D
96.23 (92.55)
Trend	↑ (↑)	↑ (↑)	↑ (↑)
% Risk Weight	75 (57)	85 (85)	88 (85)
Allocation	50/50 AU/AG (50/50 AU/AG)

At some point in the not too distant future we will recognize that the current historically high level of the Gold to Silver ratio is a real trading opportunity at low risk. But as we know this ratio could peak several percentgage points above the all time high recorded in Febr 1991 at around 100. Nevertheless the technical behavior is that of heavy protection for reasons only known to the manipulators of this market. Yet they are market participants too and this ratio could become their biggest nightmare. We happily stay slightly overweight on silver with a view to even acquire more silver (and gold) as the overall portfolio position is still largely cash which for now is holdings its own except against the larger precious metals space

Last week: 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 slight overweight on Silver in the metals space and stay wth a full allocation to Gold and Silver, hence the formal 50/50 risk allocation.