Didn’t Jim Rogers say, I buy gold when it goes below 1,000?

Prediction for Gold and Silver at close 8 May, 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)


Gold/USD LT-M MT-W ST-D
1700 (1698)
Trend ↑ (↑) ↑ (↑) ↑ (↓)
% Risk
Weight
81 (80) 86 (72) 50 (50)
Allocation 100% (100%)

Gold/USD live price


Let’s hope many people have listened to Jim Rogers and buy below 1,000. That leaves something to be desired. Gold ETF interest in the meantime remained very strong according to the latest World Gold Council update but means little as it is speculative investment and we just don’t know what the net effect is in the physical gold space. Small hoarding of physical gold by private investors still seems to be evident across intermediaries worldwide but central banks have largely halted gold purchases whilst Russia was a small net seller. Central bank activity is the key market for size and one to watch in coming months.
Daily risk weight has turned up in neutral ground whilst the gold price remained stable around 1700. The Weekly is getting into overbought territory butg lookin g make a new risk weight high and so is monthly, but our experience tells us we need to see bearish divergence in long term time frames first for a strong market like gold to develop chances of a more serious primary trend correction or reversal. That’s the deal and until this becomes evident anything can happen on the upside including a reset. That evidence if it comes will be at least 6 weeks out at the earliest and Gold/USD therefor is a strong hold. Gold is a safehaven in times of uncertainty whilst this is the understatement of the year under present market and economic conditions. The technical picture fortunately confirms this. No Change.

24 April: We need ‘REAL MONEY’ and greed a knock on the head
As people with influencial political status start talking about 100+ year Corona debt financing, there is clearly something very wrong in the way we think. There will have to be a balance between getting the national households in shape again and a certain level of sacrifice. This may mean that if and when the Elite managers of the world’s finances decide we need ‘Real money’ again, simply because there is no alternative, they need to strike that balance between the system monopolies and the people. We are pretty sure that such ‘Reset’ must also involve a significant scarifice from the wealthier taxpayer. This is where greed must be substituted for solidarity to some extend.
For the Gold market today we see that the Long term Monthly risk weight turned up on the first closing date of the month after a three months wide range consolidation. This is a technical yet significant matter as we use a standard 14 period analysis for Stochastic and RSI with a standard 9 period for the MACD.
History tells us that as Primary trends resume, as is the case with gold, we must see bearish divergence in weekly and monthly time frames, usually more than once. So far, we have seen none that qualify as such, hence we stay fully committed to the Gold trade investment. Short term corrections at this stage, being 60% above the Dec 2015 low, mean little. No Change.


SILVER FORECAST

(Previous week in brackets)

Silver/USD LT-M MT-W ST-D
15.40 (14.91)
Trend ↓ (↓) ↑ (↓) ↑ (↑)
% Risk
Weight
40 (40) 48 (45) 55 (43)
Allocation 100% (100%)

Silver/USD live price


Silver appears to want to recover from the dead rather slowly and after a two week consolidation has managed to show some fresh strength at the end of the week. If Monthly risk weight turns up this month on a bit more price strength then silver generally starts to look stronger again too. As this is clearly a highly manipulated market one wonders exactly for what purpose. Clearly certain interest is being protected. How long for this can hold is the big ?. We need patience. No Change.

24 April: Even though the weekly risk weight turned marginally down at the close on May 1st, the Daily is sloping down more rapidly without much price change. This usually signal that a bottom is in the making. That bottom could be supported by the Monthly risk weight turning up again in a bullish divergence formation. Hence no change staying fully allocated to Silver as well


GOLD/SILVER Ratio Price Risk Analysis

(Previous week in brackets)

GOLD/SILVER Ratio LT-M MT-W ST-D
109.50 (112.85)
Trend ↓ (↓) ↑ (↑) ↓ (↓)
% Risk
Weight
70 (72) 60 (60) 43 (60)
Allocation 50/50 AU/AG (50/50 AU/AG)

Gold/Silver Ratio live price


Same picture as last week with a narrowing weekly risk weight at the same net level.
Technically therefor the ratio looks weak but we need to wait for the monthly to confirm the downtrend at the May close. The present 110 level is still bizar from a historic perspective, but in these unprecedented times nothing surprises anymore. Most analysts are at odds with all asset classes behavior and looking for others to confirm or conflict with their opinion. We are likely to stay with the Gold/Silver spread until it finds that more longer term equilibrium around or sub 50.

24 April: The May 1 close did turn the Monthly into confirmed bearish divergence as the trend turned from ‘up’ to ‘down’ although much can happen during May to temporarily reverse that again. This ratio has behaved in such a volatile manner that we cannot exclude another manipulated attempt to drive silver down and small investors into margin calls probably leading to bearish divergence. Physical Silver is the asset to own and the overall risk to own silver and stay with the ‘patience to equilibrium’ approach seems very low, also from a historic perspective. No Change


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