News
July 08, 2020
Precious metals prices broke out this morning above key resistance levels in the mining sector as well as the underlying futures market for the raw metal.
SILVER
In my post from June 10th, I mentioned 18.90 as a key initial target for silver. This level at sub-$19 has been an importance resistance level in silver for four years, getting rejected each time except for the false breakout in September. The breakout here is meaningful. The 14-day RSI (Relative Strength Index) is still not overbought and price looks like it has some room to run. The next target is $21, which represents the 161.8 Fibonacci extensions from the February/March high/lows.
Pan American Silver (PAAS), one of the leading silver mining stocks, also broke out this morning with a gap up above the 127.2 fibonacci Extension from the February/March high/lows. This move follows a multi-week basing period and targets just under $36 on this initial thrust, which is the 161.8 fibonacci extension.
GOLD
I have always viewed this $1800 price level in #gold as more significant than the $1910 blowoff top in 2011. The price level at $1800 was the multi-month, triple-tested resistance level that precipitated the 6-year base. If price holds, the breakout above this level is secular and very bullish, in my opinion, with the initial target at $2,000/ounce, or the 127.2 fib extension.
GDX
The Van Eck Gold Miners ETF had breakout and successful retest of the $32 level, broke out of the bull flag and is now taking out the May peak. My target is $42, which is the 161.8 extension from the Feb/March high/lows.
GDXJ
The Van Eck Junior Gold Miners ETF has been the laggard, but it is finally finally retesting the 2016 peak. Price has some room to run here and a bullish breakout/retest would be a great setup to add to long positions. The RSI hasn't been overbought on the daily chart since July 2019. Now would be a good time to show some strength.
June 10, 2020
Silver has been a shining star in the metals complex since the March low of $11.60, outperforming all other metals on its run to $18.90/oz. The upside leadership was a welcome sign for precious metals bulls, as silver tends to be a bellwether for bullish appetite in the space.
I anticipated the bullish price action in silver on the breakout from $14.50. The most recent run to $18.90 encountered sellers for the second time since March, and since that time price has been consolidating in a falling wedge. The breakout of this wedge this morning on the 4hr chart looks promising for another run to $18.90, but price needs to definitively clear $18.18, which has been a strong area of selling action for the last few months.
Big picture, price is uptrending in a channel, and until the channel breaks, the trend remains up. Recently, price retested rising support from the March low and bounced nicely. Bulls want to see this hold. Bears need to push price down through 17.65, which, if successful, could usher in a drop to back to the 16.20 area.
I have my Fibonacci levels marked as follows, with a break of $18.90 setting up a run to $23+.
Big picture, the silver weekly chart is a confirmed breakout and successful retest of the falling trend line dating back to 2012. The breakdown in March appears to be a failed breakdown, and from “failed moves come fast moves.” price has also recaptured the 200 week moving average and seems poised for a run higher as we head into a stronger seasonal period in the fall.
May 07, 2020
It has been over a month since my last entry on the markets, and aside from a few Twitter posts, most of my analysis has been confined to my desktop. The impact of the coronavirus on the retail precious metals market has been historic, with dueling supply and demand shocks, and as president of Texas Precious Metals, my time has been consumed by day-to-day operations. I finally have a bit of a respite this afternoon to share a few thoughts on the metals markets.
GOLD
Back in November, I identified a 5-wave pattern setting up with two bull wedges that created a series of highly favorable long setups (see chart above). The big sell-off with the COVID debacle was concerning, but as we can see from the chart, horizontal support held and the bounce higher was strong and swift. It is possible (as some suggest) that Wave 5 is now completed, but I continue to think gold is pushing for all-time-highs based on price action and consolidation. Also encouraging is the fact that gold is sitting right at the anchored VWAP (volume weighted average price) from the March 31st lows. (I used TrendSpider for this chart.)
Zooming out to the monthly chart, the big selloff in March produced a long-legged doji that retraced the move to the 50% Fib retracement level (1450). Since that time, gold has rallied higher and seems to be pushing for a test of all time highs of $1910 (monthly close of $1830).
SILVER
Silver is also coiling for a move, sitting at both horizontal support and rising channel support. From a risk/reward standpoint, a long entry here with a stop below 14.60 is favorable. The upside should target ~18.80.
S&P500
Lastly, just a quick comment on the S&P 500. The bearish case is that we have witnessed the beginning of 5 waves down, with wave 1 culminating in March and an A-B-C correction into April and early May. There is a head and shoulders top just below the 61.8% fibonacci retracement and a break of rising channel support would target 2620. The bulls would gain the upper hand if channel support holds and we break above 2940-2950 to the upside. A big rally to 3300 would likely ensue.
April 02, 2020
When people are worried about the future they turn to gold to protect their savings. That’s rarely been more true than today.
Surging demand and disruptions from the coronavirus pandemic have created a shortage of the small gold bars most popular with consumers. Those who do manage to get their hands on metal have to pay up –- well above the per-ounce prices being quoted on financial markets in London and New York.
Some dealers are desperately contacting clients to see if anyone is willing to sell their gold bars and coins, and offering a rare premium over spot prices. Others have given up trying to trade altogether.
“People want to buy, not to sell gold,” said Mark O’Byrne, the founder of GoldCore, a dealer based in Dublin. “We have a buyers’ waiting list and we emailed our clients seeing who wished to sell their gold. At this time there is roughly only one or two sellers for every 99 buyers.”
Size is a key reason for the crunch. While there’s plenty of gold in a big trading hub like London, banks and other institutional investors there typically use large bars of 400 ounces. That’s not practical for a regular person who may not want to cough up more than $600,000 for a single bar. Instead, retail investors prefer kilobars (about 32 ounces), 1-ounce bars and coins, or something even smaller.
March 19, 2020
DEAR TPM CUSTOMERS,
As a health and safety precaution we will be closing our client lounge for the next thirty days. If you wish to purchase or sell metals, please contact our trading desk at 361-594-3624. We will either ship items we sell to you or arrange shipment for items we buy back from clients.
Texas Precious Metals Depository will remain open for clients to retrieve or drop off contents during this time. We appreciate your understanding.
