It’s been a rough few years for gold investors. Failed breakout attempts and a sideways grind kept the sector trendless. Gold blasted through heavy resistance this week, and it looks like a legitimate breakout. The formidable danger zone surrounding $1360 should now be support.

Silver is lagging gold, not unusual due to its industrial element. A slowing economy may keep demand and prices subdued…for a time. However, at some point, hot money will see the value and that’s when prices will play catch up. When silver runs, it runs hard and fast. So as long as gold maintains its breakout, I think investors can accumulate silver in anticipation of a tremendous move later this year or 2020.

Some members are concerned that “we missed the move.” If gold broke out, as I suspect, then the move is just getting started. There will be plenty of opportunities in silver and to buy the dips going forward. The weekly chart of gold puts this into perspective.

US DOLLAR WEEKLY

The dollar finished the week below the moving averages and the intermediate trendline. A sharp breakdown could continue to fuel gold’s rally.

GOLD WEEKLY BREAKOUT

Prices finished the week above $1400, and it looks like this six-year bottoming process may finally be over. If so, then gold should begin to work its way higher to complete what I think will become a massive rounded bottom before breaking out above $2000 in 2021 or 2022. The next major resistance arrives between $1500 – $1550. Ideally, prices should hold support between $1310 and $1360 on any pullbacks.

Looking at the short-term charts, it’s easy to feel defeated – like you’ve “missed the move.” However, the 30,000-foot view tells a different story. If gold is just breaking out of a six-year bottoming process, there will be plenty of time for tremendous gains and to buy the dips. I would liken our current position to that of December 2002 when gold broke above resistance at $337. That was not the end of the move…it was the beginning. Prices entered a multi-year advance finally peaking nine years later at $ 1923.70.

GOLD DAILY

If prices pull back, I’d expect to see support between $1340 and $1365 arrest any declines. Longer term, the 200-day MA should become a floor for corrections as prices trend higher. Now that we have a breakout, I think investors can use a buy the dips strategy.

SILVER WEEKLY

I’ve been struggling with the lack of participation in silver. Looking back, it’s common for silver to lag gold prices, sometimes by several months. Therefore, prices may remain rangebound a bit longer before playing catch up in 2020. When investment demand finally builds, I think prices could rise explosively. Ultimately, I think silver will take out the high near $50.00.

Silver is a different animal compared to gold. Sometimes it leads but often it lags and then plays catch-up. For example, look at the price action in late 2002 when gold broke above $337. Silver remained hostage to its 200-week MA for several more months before finally exploding higher. I think we will get a similar result this time. The next explosion higher should take prices to $26.00.

Similar to the price action through 2003, silver is consolidating below its 200-week MA. I suspect we will see a run to $26.00 once prices decisively break it.

SILVER DAILY

The gold to silver ratio finished the week at 91.57, a level not seen since 1993. It’s possible the ratio continues to 100 as prices lag gold. The trend in silver may not gain meaningful momentum until next year. I think investors can accumulate positions expecting silver to play catch up and a reversion to the mean in the gold to silver ratio.

PLATINUM WEEKLY

Like silver, platinum is having a rough go of it. Prices are near significant support at $750. I think platinum is a good long-term investment, but it may take some time before the trend reverses.

GDX

Miners are in the resistance zone that stopped several rallies. The move since late May has been spectacular. I’m a little hesitant on jumping in until prices clear $25.50. If gold continues to surge and closes above Friday’s $1415.40 high, this could turn into a runaway move. Thursday’s gap is key. Closing below $24.00 would signal failure. On the bullish side, I can make a case for a measuring gap implying a target of $29.00+ if prices runaway.

GDXJ

Juniors are approaching a trendline that has stopped previous rallies. We should know early next week if miners are topping or in a runaway move. Thursday’s potential measuring gap would support an advance to $39.00+ if the trend continues to accelerate higher.

WTIC

Oil bottomed just above $50.00. What prices do next depends on several factors. If Trump fails to end the trade war with China, economic growth will stumble and the US will enter a recession. That would be oil bearish. However, from a technical perspective, it might be worth trying a long trade if prices pull back to the 10-day EMA in the coming days.