Gold/USD on June30 recorded the highest quarterly close ever | Update close 3 July

Prediction for Gold and Silver at close 03 July, 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)

1773 (1769)
Trend ↑ (↑) ↑ (↑) ↓ (↓)
% Risk
93 (88) 92 (89) 82 (88)
Allocation 100% (100%)

Gold/USD live price

At a Gold price of 1782, Gold vs USD recorded the highest quarterly close in history.
At 1768, it wasn’t quite the highest London PM fix which was recorded on September 30 2012 as Gold rallied to a primary high versus many major fiat currencies except the USD which made a secondary price high that 3rd 2012 quarter. Below is the quarterly Gold/USD chart updated for June 30, 2020 showing a risk value of 96.

With all time frames in the overbought risk weight zone, what is the technical narrative today? Are we at risk of a major drop in the Gold price versus USD?
During the major primary Gold rally between 2004 into Sep 2011 gold peaked several times in a similar fashion. As shown on the quarterly chart the March 2004 risk weight peak at Gold $423 came after just a 70% rally from the post 1980 low in 2000 at $250. The current rally, as there is no peak yet, is still on track after a 68% rally from the Q4 2015 low.
Because these long term Gold measuring timeframes are in the overbought zone, it is extremely likely that one of the shorter frames, i.e Weekly and Monthly, let alone daily will first diverge several times before a final peak will be printed. Therefore, the answer = ‘possibly but not for very long’. This is 2004 all over again with Monthly and weekly time frames showing similar risk weight data.
The Gold/USD market looks as solid as it did 15 years ago and the greater risk as discussed before is for price to surprise again with a huge lift. We could make projections based on Fibonacci ratios, but that is meaningless at this point. We shall remain very patient and need to see at least some bearish divergence in the Longer term time frames before calling any intermediate top.
Having said that, Gold against other major currencies has already showed intermediate bearish divergence, but these also are more likely to appear as a pause in the long term trend.
No Change in staying fully invested.

26 June: 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


(Previous week in brackets)

18.00 (17.70)
Trend ↑ (↑) ↑ (↑) ↓ (↓)
% Risk
70 (57) 88 (87) 70 (60)
Allocation 100% (100%)

Silver/USD live price

The Silver price continues to lag behind technicals calling for a more rapid advance for some time. Risk weight and trend direction still favors the upside and even more so than gold.
This also applies to the Silver quarterly risk weight ending at 70 on June 30 with some way to go.

As price could be anywhere on the upside whilst this trend continues long term, silver remains a strong hold. The first objective is 21.15 and then 35.50. The same picture can be visualised for Silver vs other major currencies with Monthly risk weight in a strong uptrend still. Daily risk was trending up (hawkish) again last week but turned down again on Friday. Support is at 17.00 and the technicals would rather anticipate a further pause followed by bullish divergence again. No Change on Long term hold.

26 June: 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

GOLD/SILVER Ratio Price Risk Analysis

(Previous week in brackets)

98.03 (99.12)
Trend ↓ (↓) ↑ (↑) ↓ (↑)
% Risk
43 (54) 14 (13) 32 (67)
Allocation 50/50 AU/AG (50/50 AU/AG)

Gold/Silver Ratio live price

The ratio is again losing momentum which is entirely due to the sense of more silver price manipulation. With the weekly risk trend still up at the lower end 0-20 range at 14 and Monthly strongly down we must give ther Long term Monthly benefit of any doubt. For now. This picture can change dramatically in favor a weaker Ratio in case the silver price does show more upward momentum. If that doesn’t happen we could again be in for a longer wait towards recent equilibrium at around 60. No change.

26 June: 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

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