Precious Metals

In my previous post on gold July 2, 2016, I wrote,     “

1.       We have started a long-term bull market in gold and silver.

2.        We have seen bottom prices in most of the commodities.

3.       Gold and silver will shock everyone on the way up. 

Out of these three, the second call played out and we saw that most of the commodity including crude oil bottomed out in February 2016 – July 2016. The other two did not play out as expected. Almost 18 months later gold is still trading at the same prices and looks stagnant.

Although the bull market in gold started in January 2016 and is now two years old, it had failed to create any excitement as the bull market. One of the reason was that the price movement was noting near to spectacular. However, in last two years gold has appreciated by approximately  11% per annum which not bad. We can see the two years of the gold bull market in the yearly chart.

          

If we look at the daily chart of gold, we can clearly see time correction playing out. Since gold made a bottom in 2012 it had been almost 5 years since gold prices have been consolidating at these levels. If we look at long-term structure of gold (in the yearly chart) gold had a 10X rally from 2001 – 2011 and since then it fell by 50% (price correction). So gold has completed its price correction and time correction.

Look at the given chart I don’t see any reason why gold will not break out from these levels and surprise everyone on the upside. 

Similarly, if we look at silver, it is just waiting for the second breakout above 20$, once its above that long-term targets for silver can be anywhere between 35 -50 USD and beyond.

Summary:

1.       Once gold breakout above 1350 -1400 levels there should be a up move to 1800 – 2400 levels.

2.       The breakout in gold is imminent. I see the probability of more than 90%

3.       Silver will also do well once it trades above 20$, target stays at 35 to 50$