Metals And Miners Rolling Over

It looks like metals and miners are rolling over into the next six-month low. Support for gold ranges between $1240 and $1250.

I have positions in DUST. I’ll exit that position and reenter longs when it looks like gold is bottoming.

Platinum prices are beginning to perk up when compared to palladium. The Platinum vs. Palladium ratio may have bottomed. If correct, we should see platinum start to play catch up in 2019.

I think the Fed pushed a little too far on interest rates. Economic growth slowed, and they decided to pause in 2019. I’m guessing their next move will actually be a rate cut. Historically, the Fed waits to cut rates until it’s too late. I expect the same this time. So if I had to guess, I would assume that the economy will be in recession by the end of this year.

US DOLLAR DAILY

The dollar is stuck in a range and working its way towards the upper boundary. Fundamentally speaking, I tend to agree with the arguments for a rising dollar compared to other currencies. I have a slight upward bias. It’s possible that at some point, the dollar and gold will rise together.

GOLD WEEKLY

Prices have been consolidating in a narrowing range for nearly three years. The most recent week formed a small bearish engulfing candle. I’m anticipating a decline to the 200-week MA to mark the next 6-month low. From there, I suspect gold will rally to test the upper limit near $1370; prices will either break out above $1380 at that time or rollover for another decline.

GOLD DAILY

After a two-week bounce prices appear to be breaking down. The ideal target ranges between $1240-$1250 for this second leg lower.

SIVER WEEKLY

Physical silver is an excellent bargain near $15.00, in my opinion. A solid base has been building around $14.00. We could test that area again in the coming weeks. To the upside, silver has struggled above the 200-week MA. A breakout above this resistance level would support the next bull run.

PLATINUM VS. PALLADIUM

We may have a bottom in the platinum versus palladium ratio. If correct, then we should see platinum prices begin to outperform palladium, perhaps dramatically. The last time the ratio reached these levels was in 2001.

PLATINUM

Platinum is displaying subtle signs of relative strength. The first obstacle platinum needs to overcome is resistance between $880 and $900. Above that, and we could see a new uptrend.

PALLADIUM

After a meteoric rise, palladium is finally beginning to show signs of a top. If correct, then we should start to see gold, silver, and platinum begin to outperform palladium on a relative basis.

GDX

If miners are breaking down into a 6-month low as I suspect, we should see GDX break support next week. Initial target remains the $20.75 gap.

GDXJ

Juniors already broke their trendline. I have an initial target at $30.00.

SPY

The economy is slowing, but growth remains above recessionary levels. The Fed noticed weakening economic data and paused their rate hiking agenda for the remainder of 2019.

The market is looking for a .50 rate cut, and the Fed should probably comply. Unfortunately, that’s not how the Fed operates. To save face, they typically wait until it’s too late. Consequently, I think the economy will continue to roll over. The next move by the Fed will be to cut, but by then, it will be too late, and we will already be in a recession.