Precious Metals Market – Chapter 2 Is Starting

Bullion, Gold, Bar, Gold Bar, Currency, Wealth, Finance

Image Source: Pixabay


Precious metals have recently consolidated their advances. The question is whether the 405-day cycle will again indicate a medium-term high. Well, this cycle works as long as it works...

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The gold market remains in balance with the movements of the real market yield of the US Treasury over ten years, at least if one considers the percentage movements of the last six months...

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However, the gold price has definitely decoupled from the US dollar - and thus started its own strength. The counter-correlation has already disappeared for more than two months. It has been a very long time since this was last the case...

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The gold/silver ratio, on the other hand, continues to show an almost perfect correlation with the US dollar - which explains the rather disappointing movement of silver so far...

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The overbought situation in the gold price has already calmed down again...

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Silver, on the other hand, has never experienced the euphoric days of 2011,2016 or 2020. It can therefore also be expected that the current uptrend has not yet come to an end, as it usually only does with the euphoria...

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The big buyers are to be found in China. And they are not only in the physical sector. The number of outstanding gold ETFs with physical backing is still close to an all-time high...

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In the physical spot market, Shanghai continues to pay around 2 % more than the Western exchanges. A warning sign will only be given when this is no longer the case...

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However, the action in Shanghai has long since reached the silver market - physical silver is now paying over 13% more than in the Western markets...

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The difference between the 'smart' investors in Shanghai and the western markets is fascinating: However, investors in Shanghai have actually paused in their buy orders - without generating strong distribution...

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In contrast, Western investors have used the higher precious metal prices over the last few weeks to book their profits. However, this is no longer the case: despite the correction, there was no more distribution in the western gold markets...

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The short-term Gold Market Pendulum suggests that the gold price should soon show a rising trend again...

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The same indicator promises us the same in the silver market...

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The gold seniors should also have ended their (very small) correction phase. The GDM sensor is more pessimistic than ever - which is what contrarians like to see most... bullish action...

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In contrast, another indicator showed far less pessimism - and thus strength...

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The very small correction has even triggered a relatively strong 'exaggeration' in the GDM Index - very bullish...

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