Originally published Dec. 14, 2022 by TraderStef on CrushTheStreet
Gold and silver held firm today following the Federal Reserve’s FOMC monetary policy meeting that delivered an expected 0.50% increase in the Fed Funds Rate. The precious metals have made solid upside progress on the price charts since last month’s technical analysis with a rally after consolidation in a bottoming phase. They’re both on the doorstep of potential gains as we transition into the New Year if winter seasonality comes to fruition via India’s wedding season. Physical bullion and sovereign mint coin inventories remain elusive due to high demand, but premiums are actually subsiding for retail stackers.
Below is a selection of choice articles since my late fall analyses on Nov. 6, gold and silver’s seasonality chart, today’s technical analysis including the dollar chart, then great interviews with Lacy Hunt and Jim Rickards to end the day.
- Western central banks guilty of enormous white lie – Ambrose Evans-Pritchard, Nov. 7
- Treasury Market Liquidity and Volatility Problems – Peter Schiff, Nov. 21
- Silver Demand on Pace for Record Year – Peter Schiff, Nov. 21
- China stockpiling gold to cut U.S. dollar dependence – Nikkei Asia, Nov. 22
- Celtic gold coins stolen from museum in stunning heist – Fox, Nov. 23
- Gold Miners Ordered to Sell 20% of Bullion to Ghana – Bloomberg, Nov. 25
- Ghana in Talks With Dubai Oil Refiner to Barter Gold for Fuel – Bloomberg, Nov. 28
- JP Morgan Says Sell Oil, Buy Gold for 2023 – GoldFix, Nov. 29
- Will Your State Reject the Fed’s Digital CBDC Dollar? – Economic Prism, Dec. 2
- CME raises margin requirement on gold futures contracts – CME, Dec. 2
- LBMA creates database of Russian bullion bars – Reuters, Dec. 2
- Mongolia’s Central Bank buys 20 tons of gold – Macau Business, Dec. 4
- Central Banks Start 4Q22 Buying More Gold – Peter Schiff, Dec. 5
- Putin Doesn’t Bluff – Jim Rickards, Dec. 6
- Gold to $3k in 2023 as CBs fail on inflation mandate – Saxo Bank, Dec. 6
- Iron Ore Futures Rise As China Eases COVID Lockdowns – OilPrice.com, Dec. 8
- Staff losing faith in its European Central Bank – Jan Nieuwenhuijs, Dec. 8
- Russia’s gold reserves a target in U.S. defense spending bill – KITCO, Dec. 9
- Iran Smuggling Venezuelan Gold To Finance Hezbollah – IranIntl, Dec. 12
- Top 5 Gold Buyers’ Motives Revealed – GoldCore TV, Dec. 12
- Fed’s Paul Volcker Historic Mistake – Jim Rickards, Dec. 12
- A Stunned Wall Street Reacts To The CPI Miss – ZH, Dec. 13
- FTX’s Sam Bankman-Fried denied $250K cash bail – NYPost, Dec. 13
Let’s move on to the gold, silver, and dollar chart. Be mindful that a window of opportunity for swing or scalp trading paper ETFs, mining stocks, or futures contracts does not necessarily equate to the timing for buying physical metal. To view a larger version of any chart below, right-click on it and choose your “view image” option.
“My reasoning behind today’s gold and silver chart analysis is four-fold and complicated, as there’s a good chance that they landed into a bottoming zone due to geopolitical and monetary policy actions that surfaced over the last week.” – TraderStef, Sep. 28
Gold Spot weekly chart as of Dec. 14, 2022 at 5pm ET…
Excerpt from Wednesday Sep. 28, 2022 weekly gold chart analysis:
“Persistent inflation moved the Fed to lift interest rates again in July, but the market interpreted negative GDP growth in 1Q22 and 2Q22 as recessionary and the Fed’s July FOMC commentary hinted dovish before the end of 2022 (aka Taper Caper). That sentiment gave the stock market… and gold a seasonal tailwind in mid-July to print an $1,808 high in mid-August. The dollar rallied again and gold rolled over and breached the lower 2018 trendline, 200 EMA, and 38.2% Fibonacci level. This week’s low at $1,615 (just above $1,611 lateral support) did not last long following the BoE’s pivot to QE… Note that there hasn’t been a Death Cross of the 50 & 200 Exponential Moving Average (EMA). If positive sentiment sticks… monetary policy alone will rally the metals no matter what the geopolitical situation may be.”
Excerpt from Nov. 6, 2022 weekly (Twitter thread) gold chart analysis:
“After four brutal stair steps into a downtrend since March, gold is attempting to solidify a bottoming phase… Despite the U.S. stock market disappointment with Jay Powell’s post-FOMC fedspeak this past Wednesday, markets rallied all day Friday after the dollar plunged more than 2-full points on the heels of a less than stellar unemployment report. Gold’s rally was substantial, but price action on the weekly chart did not take out the Down Channel’s overhead trendline, 200 EMA, and 38.2% Fibonacci level at $1,680… The $1,611 lateral support is more relevant as each week passes without a break lower. As of Friday’s close, we have a Triple Bottom within a choppy and tight horizontal channel, and a solid Hammer Candle that could lead to additional upside… My conclusion is the same at it was in September: ‘Gold is still not out of the woods and the chart is neutral until the DMI-ADX reverses to a bullish strength-of-trend signal. In the meantime, there will be opportunities to scalp any upside price action.’”
Gold printed a high of $1,824 yesterday after the lower than expected 7.1% CPI inflation print, was choppy under $1,815 ahead of today’s FOMC meeting, then closed at $1,806 following a bout of volatility during the Fed’s monetary policy announcement and live presser. The pet rock had a solid $200 rally since the pivot off a Triple Bottom consolidation above $1,611 from late September through early November. Then gold ripped through the Down Channel’s topside trendline, all of the moving averages during the second week of November, took a breather at the 50 EMA and $1,800 for two weeks, then tapped the 23.6% Fibonacci at yesterday’s high. There were numerous opportunities this fall to layer in core paper positions at lower price points or scalp trade the intraday price action.
The DMI-ADX is trending positive but indecisive without an Alligator Tongue power trend setup, Momentum, Money Flow, and the Commodity Channel Index (CCI) are rising, the StochRSI is approaching an overbought condition, Volume printed lower last week, and this week’s candlestick and Volume bar do not finalize until Friday’s close. The chart is bullish heading into the New Year and winter seasonality, but caution is warranted with the usual year-end profit taking and book squaring in financial markets. Also, keep a close eye on the dollar’s price action. If it falls below the 2017-20 lateral, gold will likely rise, but if it pivots into a relief rally, gold will likely tumble to support. Gold’s next topside resistance is in the $1,830s and support is wherever the 50 EMA trends.
Silver Spot weekly chart as of Dec. 13, 2022 at 5pm ET…
Excerpt from Monday July 18, 2022 weekly silver chart analysis:
“The first week of March printed an indecisive Spinning Top and the subsequent Down Channel broke through $21.49 lateral support during a concurrent spike in the dollar. Silver is resting upon a confluence of support that includes highs from late 2020, a 61.8% Fibonacci retracement level at $18.70ish, and the lower trendline of a busted Down Channel drawn back to 2021.”
Excerpt from Wednesday Sep. 28, 2022 weekly silver chart analysis:
“Silver followed gold’s short-lived seasonal rally from an $18.12 low in mid-July to the $20.83 high in mid-August. A subsequent $17.53 low printed during the last week of August and rallied to a $20 high by mid-September. This week’s low was $17.95 and spiked to a $19.02 high following the BoE’s policy pivot. Silver’s lows are bouncing along the same confluence of support noted in July.”
Excerpt from Nov. 6, 2022 weekly (Twitter thread) silver chart analysis:
“The price action continues to pivot off a confluence of support noted in July’s analysis and formed a Triple Bottom… Note that there hasn’t been a Death Cross of the 50 & 200 EMA. My conclusion is the same at it was in September: ‘In order for silver to end its current malaise, it must breakout from the (black) overhead trendline, the $21.49 lateral, and leave the 50 EMA in the dust. The chart is neutral until the DMI-ADX reverses to a bullish strength-of-trend signal. In the meantime, there will be opportunities to scalp any upside price action.’”
Silver has rallied more than $6.50 off the $17.53 August low to this week’s high of $24.11. A solid Up Channel has formed since October that sliced through the overhead trendline (black) and resistance noted last month, consolidated at $21.49 during November, took out all of the moving averages including the 50 EMA, and pierced the last topside trendline (red) this month. There were numerous opportunities this fall to layer in core paper positions at lower price points or scalp trade the intraday price action. I cautioned that $24 could be the next consolidation level heading into the FOMC policy announcement, and that’s where resistance surfaced today with a close at $23.83.
The DMI-ADX is trending positive with an Alligator Tongue setup, the StochRSI is in overbought territory, Momentum, Money Flow, and the CCI are elevated and choppy, and Volume is steady but unremarkable. The chart is bullish heading into the New Year and winter seasonality, but caution is warranted with year-end profit taking and book squaring in financial markets. Keep a close eye on the dollar’s price action. Silver’s next topside resistance is the 23.6% Fibonacci level at $25.70 to $26, and support is wherever the 50 EMA trends.
$DXY USD-Dollar vs. Gold Spot weekly chart Dec. 14, 2022…
Legend Lacy Hunt on the Fed and Monetary Policy – Escape Velocity, Nov. 25
Collapse of Global Economy – Jim Rickards & Keith McCullough on HedgeyeTV, Dec. 7
Plan Your Trade, Trade Your Plan
Headline Collage Art by TraderStef
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