We’ve got some serious resistance on both gold and silver. Gold is sitting right at a long-term trendline, the top of the channel that stretches back for years. It’s unlikely to break higher without a fight, and even if it does, it might just be a shakeout. Silver’s rising wedge looks more fragile—it’s hitting that 33.5 resistance zone, and the wedge pattern hints that it could fall apart fast. The market's been building this up, but the upside isn’t as strong as it looks on the surface. The COT reports are showing a concerning lack of sellers, with no real push from shorts on the futures. That’s where the contrarian play comes in. When everyone’s leaning one way, it often swings the other. Add in the fact that there’s relatively sparse open interest in puts, and you’ve got a classic setup for a quick, hard downside move. Options writers don’t seem to want to price in a selloff, which could be a sign they’re either clueless or about to get blindsided. As for the stop loss strategy, we don't have to take a huge amount of heat. R:R highly favorable here. Set stops just above key resistance levels, maybe 2715 on gold front month and 33.75 on silver front month. With these stops, silver would most likely get stopped out first, unless it starts to show weakness immediately relative to gold. If gold pushes above 2715, we’re wrong, no point in holding on, but will be on watch to determine if that breakout above 2715 has legs. Targets depend on how the price action shapes up once it becomes profitable. One bearish scenario calls (puts?) for a larger pullback in Gold to around 2100. The extreme scenario for silver indicates a pullback of 50% from current levels, although this is not the most likely outcome for this trade. -JB
Not in the trade or thinking about getting in the trade. However, maybe something to consider. Prior to covid and the policy response, the bullion banks were doing a good bit of business in such a low rate environment. Under ZIRP, short term rates were so low, that the lease rate offered an attractive yield. Not an expert, but my layman's interpretation is that low lease rates cause the physical acquirers to either sell or hedge (via futures/forwards etc.), and that rate environment persisted for a very long time. I hate to use the cliché, but you might consider the new rate environment to have fundamentally changed this market. Perhaps, Sir, this time is different. I know a lot of people believe the price to be manipulated, but maybe thats just a way for them to explain away what a lack of financial sophistication suggests to them as 'manipulation'. If I was gonna trade this, I would be charting half a dozen ETF spreads and would have VWAP, Vol, and all the futures spreads on charts (gold/silver, gold/platinum, etc).
Long term bullish IMO. Would like to see it drop to the buy zone so I could add. Fiat currency is being destroyed. BRICS countries are moving away from the US dollar after Biden weaponized the dollar against Russia. Other countries don’t want to get in a similar situation. I’ve been long for more than a year but not long enough.
I wonder if the stop loss on SIZ2024 needs to be above 34.00 instead of 33.75. Breathing room and all, esp given that GCZ2024 is already below the major resistance at 2700 and could noodle around below 2700 this week. But, there's some indication that gold might gain relative strength vs. silver here, so the 33.75 stop might be okay:
Will crude's direction affect bullion's direction here? CL futs could be a short here below 76. Will the US Dollar index continue breaking out higher here? If so, will that possibly correspond to a pullback in bullion as well? DX futs already broke the similar downtrend line and the US Dollar index is sitting right at it, showing strength in last week's rally.
A market at all time highs, such as Gold currently, has no resistance. All longs basically are in some sort of profit, all shorts are basically in some sort of loss.
there're numbers of channels on youtube that said the BRIC countries are accumulating gold for their new currency (backed by 40% gold + 60% by the member states' currency).
In terms of horizontal resistance vis a vis ATH? Yes. Upper sloping channel? 2700 is the current area of interest where the rally may fizzle for now. GCZ2024 reached 2700 over a week ago.