Gold/USD price in full week consolidation | Update close 17 July

Prediction for Gold and Silver at close 17 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)

1808 (1797)
Trend ↑ (↑) ↓ (↓) ↓ (↓)
% Risk
94 (93) 93 (93) 83 (82)
Allocation 70% (70%)

Gold/USD live price

Our 30% temporary exit at 1802 on Monday 13 July with a $470 net gain started a full week of GoldUSD price consolidation in a 25 dollar range between 1790 and 1815. As all time frames, including hourly with bearish divergence are at high risk levels we stay with our slightly reduced allocation. Risk of a more susbstantial correction is still on the cards possible, hence our minor protection. We still expect bearish divergence in the weekly and monthly time frames, but it is entirely possible that the consolidation around this important 1800 level may last several weeks or even months. Short term risk management favors re-entry on confirmation of an interim low for instance if daily risk weight divergenes strongly verses medium term Weekly and a new breakout to new 2020 highs which preferably is not the result of a rapidly deterioration dollar value. No change for now.

10 July::

Temporary reduction of the Gold position

The 1809 close on July 8 was the highest since Sept 2011. The trend is not finished but with daily risk turning down on bearish divergence for a second time this week we take 30% off the position just to allow for a stronger price reaction and with a view to re-enter relatively soon. Maybe the re-entry will be in Silver/ This is the first sale since entry in October 2018.
We expect Mt Weekly to show bearish lower risk to higher price divergence before an intermediate peak is reached. This partial exit is seen as a trading opportunity an d taking out some real risk to a stronger than expected price reaction in the short term time frame which could be $100. The picture ag Euro and Swiss Franc is similar and confirm this potential risk.


(Previous week in brackets)

19.25 (18.68)
Trend ↑ (↑) ↑ (↑) ↓ (↓)
% Risk
75 (75) 92 (90) 91 (85)
Allocation 100% (100%)

Silver/USD live price

As with Gold/USD, silver shows signs of short term consolidation although the Long term monthly timeframe shows solid strength. Our 21.15 objective is still very much in play even though the 19 handle has set a fairly strong resistance level since September 2017. It may take a bit longer for Silver to drive through comfortably. Unlike physical gold, which is easier and cheaper to trade we hold on to our full silver allocation until risk in the primary uptrend which started, like gold, in December 2015 and hit a new unexpected quick price low in March this year shows bearish divergence in either the Medium term or Long term time frames.

10 July: Silver was a little stronger this week and the picture is somewhat similar to gold but carrying more long term upward momentum. The first real objective is still 21.15 and we stay fully invested.

GOLD/SILVER Ratio Price Risk Analysis

(Previous week in brackets)

93.27 (95.72)
Trend ↓ (↓) ↓ (↓) ↓ (↓)
% Risk
40 (40) 10 (13) 10 (14)
Allocation 50/50 AU/AG (50/50 AU/AG)

Gold/Silver Ratio live price

The Gold/Silver ratio allocation is a direct result of the risk allocation to the individual metals, but also shows how we seen an opportunity to allocate more to Gold or Silver in the metals space. As we have seen with Platinum, that metal has lost all its shine even though it is the Rolls Royce of precious metals. Some day in the future we shall not be surprised to see PT rise above the level of gold again whilst having lost so m uc h more than we expected a few years ago. Historically platinum must still represent a tremendous opportunity as does Silver at this level of ratio well above the equilibrium of closer to 60. Platinum is a clear buy if it closes above 900 with an immediate $2000 target. As it may be difficult to get hold of physical PT some allocation to this metal can be part of the the total metals allocation. Long term risk appears low and opportunity high. Physical pt numismatics, if at all available and at a much higher price, is also a worthwhile wealth preservation commodity. No change to keep a level balance between gold and Silver, and or some Platinum, which a bias towards silver.

10 July: Gold/Silver ratio support at around 80 and then 64 is where we aim this ratio to go. Both Daily and Weekly risk is getting oversold and are expected to first show intermediate bullish divergence to seriously challenge the current Gold/Silver ratio downtrend that started after peaking at 128 on 18 March, 2020. In line with our 30% Gold/USD allocation reduction and staying full with Silver/USD the ration clearly leans in favor of Silver running up faster than Gold in the next few months. No change

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

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