Only frustration may push gold down temporarily | Update close 19 June

Prediction for Gold and Silver at close 19 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)

1742 (1729)
Trend ↑ (↑) ↑ (↓) ↑ (↑)
% Risk
87 (87) 85 (85) 78 (73)
Allocation 100% (100%)

Gold/USD live price

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.

12 June: Whilst the Gold derivatives markets continues to dominate price discovery for traders and miners and thus determines the price of physical metals, it is becoming increasingly clear that holding physical gold and silver is the lowest price for risk insurance one can buy. There aren’t many companies in the world that can truly offer unencumbered ownership of physical gold unless you buy small quantities of the real metal from an online shop. For hedging speculative long physical gold or silver only writing calls or selling gold and silver futures is an acceptable lower risk trade. This weeks close pushed the price back up to where it was 2 weeks ago and the advance is far from over because we haven’t seen extremes yet in the longer term time frames whilst we expect a bearish divergence formation first in both the Monthly and Weekly risk weight periods. This means the price is likely to continue its primary uptrend well into Q4 at least. Unless a ‘reset’ event occurs sooner, but that also is pure speculation.
The short term bullish divergence as discussed last week (see below) materialized and we may now expect a break of the recents highs (1765) into the low 1800’s soon and finish an intermediate advance. It took only 2 months for the Gold market feature a large $300 rally and it has now taken a 4 week breather. This is very strong performance indeed and indicates massive fear of international monetary discomfort. No Change. Stay fully invested in Gold


(Previous week in brackets)

17.58 (17.42)
Trend ↑ (↑) ↑ (↑) ↑ (↓)
% Risk
57 (55) 85 (82) 37 (56)
Allocation 100% (100%)

Silver/USD live price

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.

12 June: With daily risk further down, Weekly up in higher risk area with Monthly up at a neutral level the technical picture has not changed much from last week. Still possible to drop into support at 16.80 level but this would diverge daily vs weekly in a positive sense for Silver, wich can then resume its long term upward trend. No change

GOLD/SILVER Ratio Price Risk Analysis

(Previous week in brackets)

98.56 (98.45)
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
54 (54) 12 (18) 66 (38)
Allocation 50/50 AU/AG (50/50 AU/AG)

Gold/Silver Ratio live price

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.

12 June: Last week’s technical analysis still holds. We expect the Short term Daily to advance a little further before the downtrend can resume in tandem with the Long term months risk weight trend (down). It means that Sillver still may underperform Gold for a few more days this coming week. No Change

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

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