Oct 2018 – Gold & Silver – Higher For Now But Correction Still Likely To Follow 16th October 2018

Whilst some may expect each report to provide a fresh new insight into the metals complex each week, nothing has changed from last Monday’s report. We had the expectation of corrective 4th wave rallies in both Gold and Silver, and thus far those rallies are progressing. As there is little to update on other than that, the following still applies:

“Starting as always with Gold [below], there is little to suggest otherwise to what was outlined last week. The move up off the low of $1,160 at the end of August has continued to be corrective.Unless is get above the $1,230-$1,240 resistance area, I would continue to count this as wave 4 of a 5 down. Unless we break higher to suggest otherwise, we should see a final lower low towards $1,120 which if seen, is just waiting for us to buy it.”

Unless Gold break below $1,180, we are still looking for a move higher to $1,221 to complete this corrective 4th wave. The price action last week began going sideways which mean, unless the market shows strength to suggest otherwise,  we could be in a diagonal pattern which could take the rest of the week to resolve.

Daily Gold Chart 08-Oct-2018

Last week’s report on silver stated the following:

“As far as silver is concerned [below], its structure off its recent low is abit mixed. For now I am continuing to assume this is our 4th wave up towards $15 – $15.20 before giving way to post a lower low near $13.60- $13.80 before an impulsive rally can begin. The low of $13.90 at the start of September did give us the minimum 5 -waves down which could suggest if silver can trade higher than $15.30, and close above $15.60 that a bottom may be in place. Since both views include a move higher to $15 – $15.30, we will need to see more action to differentiate between the two.”

Daily Silver Chart 08-Oct-2018

As the markets have not done anything other than expected this past week, and not breached any support, I continue to look higher to complete the patterns to their respective resistance levels. The one item I want to add is note the technicals at the bottom of each chart, The MACD in particular has not been very strong in Gold or Silver and would give more support to these rallies indeed being corrective. So until the markets shows further strength to suggest otherwise, I maintain that a lower low could be seen before this correction is complete. That being said, if gold and silver can break out of the resistance areas I highlighted above, we will have an early indication that the market has already bottomed. Investors need to be prepared for one more push in both markets to the downside in the coming weeks unless the market shows evidence to suggest otherwise. Please review the charts and discuss with your trader any strategies yet to be formed.

Jonathan Salmon

Jonathan Salmon

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