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AG Thorson
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Gold, Silver, Platinum, Palladium

The spike-high we forecasted in gold last week appears complete. Prices collapsed to $1874.20 by Wednesday before rebounding. We think gold could retest support near $1660 in late September, which will present the next great buying opportunity.

Gold and precious metals are extremely cyclical. Roughly every 6-months prices form an intermediate cycle low – the last low arrived in March. The current decline is just starting and may last 4 to 6-weeks. Our preferred target window (gold chart below) supports a bottom in late September or early October.

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Gold is in a powerful bull market – we do not recommend shorting or trying to trade every swing. Today’s markets are more volatile (news-driven) than ever – one black swan event could wipe out your entire trading account…if not properly managed.

After peaking at 450, our Gold Cycle Indicator (currently 373) is declining – suggesting metals and miners have started their intermediate-degree corrections.

Noticing the shift in volatility, we switched to an accumulation strategy adding to our long-term holdings only when the Gold Cycle Indicator falls below 100. This strategy dramatically reduces stress and trading anxiety.

GOLD TARGET: Gold is bouncing after Tuesday’s collapse. The descent into a 6-month low is rarely straightforward – there are several bumps and bounces along the way. The key is to avoid emotional decision making. The Premium Metals Portfolio will wait for the gold cycle indicator to drop below 100 before adding long-term holdings.

GDX CHART: Miners bounced slightly, and we could see a rebound to fill Tuesday’s gap at $42.50. Last week’s sell signal remains intact as long as prices don’t close above $42.50. Our primary is $31.00, with the potential of reaching $27.00.

We continue to like miners and platinum going forward as we believe they will continue to play catch-up to gold.

AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For more information, please visit here.

For a look at all of today’s economic events, check out our economic calendar.

 

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