Selloffs likely to continue in the precious metals
I wrote in my previous blog post that I was concerned about the price action of the precious metals over past few months. It appears that silver's triangle has already broken with platinum and gold looking set to follow.
The target for silver is $14/oz which happens to be a round number and a significant key level of resistance.
Gold in £ is likely to go back to pre-brexit levels of £860/oz. In my opinion the £ is likely to continue its rally against the dollar which will make the sell off more severe.
Platinum has been resistant and hasn't really followed gold and silver after their sell off yesterday. I feel doubtful however that platinum will rally due to the flat bottomed nature of the triangle. If the pattern is valid then it could mean PMs are in for a bear market for at least the next year or so as the target here is $600/oz. XAUUSD is in a similar macro pattern to platinum which if bearish, would mean a target to $900. This would keep the platinum to gold ratio at 0.66 which adds credence to the idea.
A quick look at the dollar index also shows that it's at a key area of trading having been in a brutal sell off for the past few months. Given that precious metals have been weak against the dollar and that the dollar may now see a relief rally I see little reason to be a buyer at the moment.
Feel free to leave your thoughts below.
Well described
Technical analysis has limited usefulness with a rigged market. The Fed and the big banks rig the market by selling 200 paper ounces of silver and gold for every ounce of metal they own. They do this to protect the dollar. If they didn't the dollar would crash and we'd have hyperinflation.
The real prices of silver and gold based on the current money supply should be $817 and $6745.