Midweek Update: Hold On – The Gold & Silver Bull IS GONNA KICK

The stage is set and the music is blaring the tune “Immediate price surge”

Haven’t seen the charts this bullish in the short term for a while, and haven’t felt this bullish in a while either. The bears do look like they could be in for a shocker as things are shaping up nicely. It is hard to argue against a price surge, but I suppose anything is possible.

The Gold Price is ready for another shot at $1300 based on the chart painting. The yellow metal has been holding in there:

For the better part of the year, the price of gold has been stuck in that sideways channel of, call it, $1220 and $1300. Well, there is just not much room left to float sideways on the daily chart. We are right up against the resistance line. What looks nice in the short term, is that when gold punched through $1300 last Friday, it drifted sideways to the support line of the upward sloping channel. That chart formation is going to have to break down as gold breaks out, and that break out is above the massive resistance at $1300.

Will it break out today? Looks like it could. Recall that just yesterday, 12,500 contracts were dumped sold on the COMEX in just 3 minutes. After smashing the price to $1287, gold is again poised to make a run at $1300 starting from $1295. One thing for sure by the chart, however, is that gold doesn’t have much longer than this week before some type of move in price happens, and that type of move could be a head-turner.

The Silver Price is equally as bullish. Silver has put in a very large bull flag on the daily chart. Just like with gold, there is not much room left to run to the side on he chart. Silver will either break out, or break down, and we’re just not sure how much more breaking down it can stand without breaking the bank’s physical limits on actual metal:

Silver prices are not overbought, and all the technicals are in our favor. We have seen the Tuesday smash yet again yesterday, but silver held up. It seems once again, as it did in early 2016, that the harder the cartel tries to smash, the less they are able to suppress price. The floor keeps being raised, and who knows how tall the skyscraper will be built. Sooner than that, however, is that silver, once again, is about to start moving, and technical indicators point up.

Further in the bullish factor of the metals is the continued strong performance of copper and palladium. This is where it gets tricky:

All the analysts are saying, well, the “base metals are overbought at this point”, “it was all based on the infrastructure build”, and “this is rampant speculation in China”. Seems odd how those same nay-sayers argue that “cryptocurrency is not overbought”, “the stock market is not overvalued based on the [non-existent] tax breaks”, and “what happens in China, stays in China”.

There is no denying the bullishness in the chart, however. The base metal and precious metal have converged again, and the move is far from parabolic as it is shaping up when watching the formation of the daily. All year long, we saw the metals form a nice rounded bottom, and they have been grinding away at moving to higher-highs. At this point, base metal and precious metal shorts may want to reconsider those positions.

Crude oil also looks like it is in store for some positive price action. However, the chart for crude doesn’t so much highlight black gold as it does speak to the immediacy of the spike in price coming to gold and silver. First, the look of crude itself:

On the daily, we can see that crude has been bounding off support that is somewhere between $46 and $47. This is signaling that we can be ready for a move higher, although there are no immediate intersections on the chart screaming “rip-your-face-off”. What is more likely as the daily is shaping up, is that the blue 50-day moving average is starting to turn up.

There is one formation that technical analysts like to throw out from time to time, and that is a head and shoulders pattern. In crude, one could argue a reverse head and shoulders pattern with the head right at the low. Crude right now is finishing the second shoulder, and since it is an inverse, this would be bullish, though seeing how long it has been forming on the charts, since late March, it could take equally longer to make the move. The bottom (no pun intended) has been shaping up on the chart, and crude is looking bullish moving forward, but more slowly. Once it gets back up to $50, however, it has to deal with that nasty resistance line it hasn’t been able to break for most of the year.

Circling back to the point about the metals and crude. Crude is looking bullish on the chart, but when compared to the metals, gold and silver are looking very bullish, and in the immediate, near term too. Crude is slowly doing it’s thing, but the metals are pent up and ready to bring fire and fury on the COMEX. We’ll see how much firepower the cartel has to respond, and we will see sooner than later. Not so much with crude.

The stock market looks ugly. There is always the possibility of a massive price spike and rally, but the Dow and S&P 500 really look exhausted here. There are wild swings occurring almost daily, and they are rounding a top our for a move lower:

No, that’s not a downward channel, that’s two ugly downtrend lines amidst the erratic swings of the last three weeks. And wouldn’t you know? Tomorrow is 8/24. I wouldn’t want to be buying up a bunch of stocks right now. No sir. I’ll just grab a couple more eagles and pop some popcorn.

On the charts, this leaves us with the US dollar. The last fiat standing. Though it looks like it is slouching rather than standing, and get ready to get out of the way, because it could faint and fall too:

There is nothing good looking about the dollar, even though the MSM and most analysts have been on the “strong dollar” meme all year. They will soon know what it ultimately feels like, and they will feel it for a very long time, as in years, because we have been feeling it since 2011 in silver and 2013 in gold. “Strong silver’ and “strong gold” were the memes as they reached $1050 and $13.50 respectively. The dollar has been strong, yes, but that was since June 2014. Now, that dog don’t hunt. Anybody seeing a bottom here might want to rethink their plan. 

The one thing working against us today is the calendar of economic news for the day:

There are market moving data releases coming out all morning, and if that doesn’t cause a little queasiness to all the gold and silver bulls, the Fed Kaplan speech in the afternoon should. Did the cartel use up all their ammo yesterday? Those three minutes in gold look like they certainly went through a lot. And if there is some political turmoil in Washington, or some event elsewhere in the world, they are going to need whatever they have left for that.

So here we wait, looking good, but again, we are breaking out or breaking down. We have broke down so many times this year that we almost expect it. The chart for both the gold price and silver price, are screaming “right now” and “this week”, and if that break out is to the upside, people are going to get caught off guard, and their are either going to be in a ton of pain, or they are going to be running as fast as they can trying to catch up.