E When Will Gold Break Out?

US DOLLAR 

The dollar is a little overbought. However, it looks like prices broke above 5-month resistance at 97.70. Progressive closes above 98.00 would confirm. If established, that would likely keep the pressure on precious metals.

GOLD WEEKLY

The weekly gold chart reveals an extensive consolidation starting after the initial surge to $1377 in 2016. I believe gold will eventually breakout to the upside…the question is when.

The current cycle peaked at $1349.80, and prices have been correcting for nine weeks. Technically, the pullback has been deep enough and long enough to meet the conditions for a six-month low. However, the upside breakout in the dollar has me concerned. If the dollar rallies to 100+ in the coming weeks/months, I think it will be difficult for gold to gain any traction. Consequently, the correction phase in gold could drag on a bit longer. Gold would have to close above $1310 on a weekly basis to support a 6-month low.

GOLD DAILY

The daily chart of gold formed a swing low at $1267.90. If this is just a bounce, then prices should rollover between here and the short-term trendline near $1300. A decisive rally above $1310 would support a six-month low.

SILVER WEEKLY

The longer-term silver chart is forming a broad base around $14.00. Since 2016, each rally has been capped just above the flattening 200-week MA. A decisive breakout above $17.00 would signal the next significant upswing in silver prices.

SILVER DAILY

The daily silver chart reveals a descending wedge formation that could produce an upside breakout. If established, I would expect a retest of resistance around $16.20. Breaking above $16.20 would recommend a test of the larger pattern trendline near $17.00.

PLATINUM

Prices have tested support twice at $880 and held. A swing low formed on Friday, and I see the potential for a breakout above $930. Overall, I believe platinum is cheap, and at some point, the gold/platinum ratio will normalize, and platinum will be more expensive than gold.

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