If Gold breaks 1805 we are in for new highs | Update close 26 June

Prediction for Gold and Silver at close 26 June, 2020

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)

1769 (1742)
Trend ↑ (↑) ↑ (↑) ↓ (↑)
% Risk
88 (87) 89 (85) 88 (78)
Allocation 100% (100%)

Gold/USD live price

Gold/USD Daily risk weight turned down on June 26 with hourly now overbought. This may put pressure on price for a few days. With Weekly and Monthly risk weight both still in uptrends whilst in overbought territory, there is no bearish divergence indication. The strong uptick during Q2 2020, is a typical recipe for a bearish divergence setup in both the weekly and monthly time frames. It means this market has some way to go before an intermediate top can be called. No Change staying fully invested. We need to see a close of a few bucks above the Nov 2011 high at 1803 to rapidly drive Gold to a new all time high against the USD.
As we are ending Q2 the coming week, our next update will include the multi year quarterly risk weight update again which could be interesting, also because Gold vs Swiss franc has not yet been able to record a new monthly closing high since its September 2012 peak close at 1663. We are right at that level now and a new monthly closing high may accelerate Gold vs USD.

19 June: All risk-weight time frames are in uptrends and getting to overbought levels. We are however not in search for any partial exit trade until the first expected bearish divergence high in the Medium term time frame presents itself. This may take a few months yet with more price volatility the short term. It looks like short term support is well established in the high 1600’s and we may see an intermediate top around 1825 before another short term correction sets up for breaking the 2011 high decisively. No Change


(Previous week in brackets)

17.70 (17.58)
Trend ↑ (↑) ↑ (↑) ↓ (↑)
% Risk
57 (57) 87 (85) 60 (37)
Allocation 100% (100%)

Silver/USD live price

With Weekly in overbought range and daily having turned down, Silver could be setting up for bullish divergence short vs medium again. The Silver market has for a long time appeared to show a bigger level of protection interest by large bullion banks. The sheer size of capital available to manipulate these markets is staggering and clearly enough to keep high volume demand in check. One day, intervention will be broken and that will open the gate towards a substantially higher price level. No Change due to a strong upward trend in the Monthly long term time frame.

19 June: Silver last week briefly dropped to 16.95 setting up for positive divergence between Daily and Weekly risk weight. That condition still applies at the close on 19 June which could develop a fairly rapid advance. ‘Could’ because this market is manipulated. There is no technical resistance until 21.15 so we can expect that level to be tested before long. Monthly risk weight shows a possible strong rally in the making. A clean break of 21.15 sets the next target at 35.50. No Change

GOLD/SILVER Ratio Price Risk Analysis

(Previous week in brackets)

99.12 (98.56)
Trend ↓ (↓) ↑ (↓) ↑ (↓)
% Risk
54 (54) 13 (12) 67 (66)
Allocation 50/50 AU/AG (50/50 AU/AG)

Gold/Silver Ratio live price

The ratio could now rally into the 102.00 level given upticks in Short term and Medium term risk weight. The Gold/Silver ratio may pause here before resuming its downtrend towards long term equilibrium close to the 60 ratio level. No Change.

19 June: Short term and Medium term Risk weight across time frames appears to like the Gold Silver ratio to correct upward since its recent 30% loss from the 128 high. Possible if the paper powers that be continue to accumulate ever bigger short postions against a more static physical hedge. Spot Silver vs dollar does not confirm this technical picture in the gold silver ratio. With Long term monthly risk weight in a stronger downtrend, this time frame may well be leading as a result and draw the short term time frames further down into August or September. We stay committed to finding 50 year equilibrium with the ratio closer to 60. No Change with staying equally diversified between Gold and Silver with maybe slight overweight silver

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Posted in A - All Financial Blogs | 2021 Forecast, GOLD / US DOLLAR FORECAST & PREDICTIONS.

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