A sunny spring is just around the next curve in the road after oppressive winter weather, an acceleration of domestic and geopolitical crises, and keeping tabs on the gold and silver spot paper price action. I rest well in knowing the intrinsic value and safe haven status that precious metals in your possession afford. They handily dwarf excessive counterparty risk that cryptophants routinely ignore amid crypto spikes, whine about sudden zero-balance experiences at their preferred fugazzi bucket shops, or become victims of fraud or cybercrimes after their tokens go poof. Whether you’re a retail-level plebe or seasoned trader/investor, I recommend a deep-dive study on investing wisdom by reading Jesse Livermore’s book “Reminiscences of a Stock Operator.”
The uptrend that typically occurs with gold and silver seasonality patterns has not manifested so far this winter, but the outcome is far from detrimental and very positive. Within my previous analyses penned in late November and mid-December of 2023, there were notes on the potential for extended consolidation:
“The #TaperCaper manifested with vigor during the Fed’s FOMC monetary policy announcement last Wednesday. Any reference to it being just ‘dovish’ is an understatement… The most important takeaway from gold’s Nov. 30 weekly chart analysis: ‘Volume is NOT rising with the rising price action, which is a negative. It looks like the all-time high zone will be challenged but expand into a consolidation pattern before leaving all-time highs behind… A noticeable increase in buy Volume must accompany any upside move for it to be decisive.” – TraderStef
Below is a technical analysis of the weekly charts that provide a near-term outlook on the potential price movement for a few weeks. Rips and dips in the dollar, breaking news events combined with dominance of automated trading decisions, HFT platforms, and artificial intelligence radically influences price action across all financial markets in either direction at any time within microseconds and causes bouts of extreme volatility. Be mindful that a window of opportunity for swing or scalp trading precious metal ETFs, spot, options, futures, or mining stocks does not necessarily equate to timing for layering core long-term positions or purchasing physical bullion and coins. To view a larger version of either chart below, mouse over it and select or right-click and choose a “view image” option.
Gold Spot weekly chart as of Feb. 29, 2024 close…
Excerpt from the Nov.30, 2023 (Twitter thread) weekly gold chart analysis:
“Since gold’s $1,810 low during the week of Oct. 1, the price action rallied to a high of $2,052 today, which is just shy of a healthy 14% gain that is closing in on the $2,079 high from the week of May 1, 2023. I provided a notice and a chart via Twitter on Nov. 26 that highlighted a Cup & Handle pattern that was developing… studies are indicative of a potential for additional price gains in the near term, but Volume is NOT rising with the rising price action, which is a negative. It looks like the all-time zone will be challenged but expand into a consolidation pattern before leaving the all-time highs behind… A notable increase in buy Volume must accompany any upside move for it to be decisive… The chart remains bullish, but caution is warranted until the all-time high zone is left in the dust.”
Excerpt from the Dec. 22, 2023 (thread) weekly gold chart analysis:
“Bombing in Gaza resumed in earnest on the morning of Dec. 1 as Jay Powell prepared to deliver a speech on monetary policy. He provided a resounding hint that the FOMC policy decision on Dec. 13 would result in a continued pause in interest rate hikes. Both news events launched gold beyond the $2,070s all-time high zone at the GLOBEX open on Sunday evening Dec. 3, but the buy Volume spike was muted and the $2,145 high quickly morphed into a profit taking bonanza before markets opened on Monday in the U.S. Subsequently, the FOMC announcement went much further than a pause and forecasted that interest rates cuts were slated for 2024 with recession on the horizon. That rally shifted gold’s pattern dynamic on the weekly chart and confirmed an Inverse Head & Shoulders Continuation pattern that’s drawn back to the 2020 high, and is reminiscent of how the chart looked from 2008-2009 during the Great Financial Crisis before a spectacular rally to new highs. Nested within the right half of the Inverse Head & Shoulders is an Ascending Triangle and a Cup & Handle (confirmed by price spike to $2,145) with a Neckline that was pierced on Dec. 3. As noted in the Nov. 30 analysis, if the all-time high zone was challenged without a coincident and sustained spike in buy Volume, the move would likely result in a Throwback and consolidation before leaving those all-time highs behind. It is healthy and preferred for the price action to build a base instead of moving too high too fast… The DMI-ADX is trying to complete a bullish Alligator Tongue setup, StochRSI is trending upwards, Money Flow, Momentum, and Commodity Channel Index (CCI) are steady and trending upward, all the Moving Averages are lined up perfectly, but buy Volume needs to significantly improve as we move into the New Year. The chart is bullish.”
Minor changes have occurred with studies at the bottom of the chart, and we have essentially been at the status quo since mid-December. An expected consolidation is playing out with the price closing above the 23.6% Fibonacci level and $1,980 support that was resistance in the past. The choppy price action has gone on to form a bullish Half Staff Flag pattern following the 1-hour spike to $2,145 on Dec. 3. The candlestick bodies remain firmly above all Exponential Moving Averages (EMAs) that assist in keeping the uptrend intact. Major resistance is at $2,100 around the Inverse Head & Shoulders Continuation pattern’s Neckline, and then a minor battle to the $2,145 all-time high. Support rests at $1,980, 21 EMA, 50 EMA, and around $1,940 at the 38.2% Fibonacci level. Gold printed $2,044 at today’s close in New York.
The DMI-ADX is still trying to complete a bullish Alligator Tongue setup and remains steadily positive, StochRSI appears to be bottoming out, Money Flow and Momentum are unremarkable and bottoming, CCI has turned upward, and buy Volume is paltry and must improve significantly for any breakout into the all-time high zone to establish new highs in blue-sky territory. The chart is bullish.
Silver Spot weekly chart as of Feb. 29, 2024 close…
Excerpt from the Nov.30, 2023 (thread) weekly silver chart analysis:
“Since silver’s $20.68 low during the week of Oct. 1, the price action rallied to a high of $25.28 today, which is slightly more than a 22% gain. The price action is closing on $26 and the 23.6% Fibonacci level for a third tap. Like gold, silver also has a Cup & Handle pattern developing with a Neckline just above $26 resistance. It is nestled within an Ascending Triangle that has printed higher lows since August of 2022. For silver to have enough momentum to challenge $29 and $30, $26 must be left in the dust decisively with rising buy Volume. The DMI-ADX does not yet have a clean Alligator Tongue power trend setup, StochRSI is rising, and the Money Flow, Momentum, and CCI are all indicative of the potential for additional price gains in the near-term, but Volume remains UNREMARKABLE. The chart is bullish, but caution is warranted until $26 is left in the dust.”
Excerpt from the Dec. 22, 2023 (thread) weekly silver chart analysis:
“Silver tagged along with gold until it ran into solid resistance at $26 and the 23.6% Fibonacci level. The price action is also in a positive consolidation phase and might finally have the legs to break away from $26 in 2024… The overall pattern dynamic on the weekly has not changed since the Nov. 30 analysis. Do not misconstrue the price point as being low compared to gold, because that factor allows much larger moves on a percentage basis in either direction. All the EMAs are lined up and Volume is exhibiting a slow upward trend since October, but is far from what’s needed for a solid rally beyond $26. The chart is bullish.”
Silver is also status quo since mid-December and in a tight consolidation with consistent closes above the 150 EMA, while wrapping around the EMAs above it and the 38.2% Fibonacci slicing through the center. The Cup & Handle was a bust as the price action has meandered too long after hitting the $26 brick wall. It appears that the dominant pattern that remains in-play is the Ascending Triangle drawn back to the highs in early 2022. Current resistance is between $23 and $24, with support resting at the 150 EMA, the lower trendline of the Ascending Triangle around $22, and the 200 EMA near $21.50. Silver printed $22.65 at today’s close in New York.
The DMI-ADX is unremarkable, StochRSI is bottoming out, Money Flow, Momentum, and CCI are flatlined, and the increase in Volume during fall has petered out and is trending downwards. Again, a significant uptick in buy Volume is required to retest $26 and have at shot at $29 and $30 resistance. The chart is neutral but has continued printing higher lows since last August.
Tim Timebomb – 30 Pieces of Silver
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