Precious Metals - Survival of the Open Minded

9/01-13/01

Welcome to this week's edition of the Precious Metals Newsletter! I will be going over the technical analysis of daily and weekly timeframes for various precious metal charts, as well as providing a brief overview of where we currently stand in the crypto cycle. I hope this information will help guide your investment decisions and provide valuable insights into the market. The goal is not to give “buy this or that” advice. The goal is to open your eyes and make you aware of all possible outcomes so that you can make solid investment decisions. Make sure to read the article all the way because there is a little poll at the end. Also if you liked the content, feel free to comment, like & subscribe/follow/retweet. Have fun reading !!

Hot takes!

So let’s start with gold! Last week we went over how one shouldn’t solely rely on 1 bearish divergence that has been building for quite some time. If you were listing to bears like ‘you know who’ you would’ve sold around $1800 or before. I explained that bearish divergences do not have to materialize immediately and as we can indeed see this week we AGAIN made new highs. With new highs at $1866. Congrats to those who held! As you can see from the blue lines the next important stops are both $1900 and $1923. It wouldn’t be wrong to take off a small bit of the position you bought during november last year. Let’s have a look at the RSI. We can see that we broke through the ‘negative’ divergence and are now breaking higher. Does this mean we are going to keep going up in a rather straight line, no. There might come a longer consolidation after $1923, but that is too early to tell imo. Have a look at the squeeze that gold made during 2022 and take out a chart of the june 2020 move. There, on that chart, overbought and negative divergences became even more overbought. So don’t listen to what permabears are calling for. They are longing all the way from the top to the bottom and shorting all the way up. They guarantee you are on the wrong side of the trade just for the sake of then farming followers on twitter like ‘see i called the pullback’. Who cares. The message I’ve been spreading is the trade was long, dips are for buying and it is important to filter out noise as long as price is supported up by the ema 9 and the ema 20 on the daily timeframe.

XAUUSD (DAILY)

So summarized. Look for a pullback when we reach $1923 area. But still we’ll have to assess the signals when we are there.

Next up SILVER !!! XAGUSD (DAILY)

For silver we can see that we’re still hanging in there with no big gains since last weekly update. Silver’s RSI has also reset more. So there are 2 ways to look at this and i’ll explain both views because I don’t want to be biased. For the bearish view of silver we can see that silver has had a brief daily close below the 20ema which can be a first warning signal of some consolidation/dip coming up. This again is still to be seen, as we rallied higher again on friday. But the chart is looking a tad exhausted so unless silver makes new highs here, silver might also take a few more days consolidation to fully reset RSI and then go higher again. On the other hand, the bullish view is the RSI is starting to cool off while silver is remaining in the $23-$24 range. Gathering power for next move. Also silver has had less steam last week because it was super stretched above it’s weekly 9 and weekly 20 ema’s. See the chart below :

XAGUSD (WEEKLY)

For my part, the weekly rallies and long the dip mentality stays as long as we make weekly closes above the 9EMA and 20EMA on the WEEKLY chart. General Conclusion for gold and silver is that Gold looks stronger here then silver but you just have to assume that the rally is intact as long as the rally is supported by the weekly ema’s because metals like to do shakeouts.

Let’s have a look now at the crypto market aswell because there were some people asking me for a brief overview to broaden their minds from the metal space only.

CRYPTO

$BTC is going for its 4year cycle low or has gone for its low. It is too early to tell. But the sentiment and opinions on crypto are as bearish as they were on precious metals during the summer months. So sentiment wise I think everything is in place. For those that think that crypto is here to stay, one could allocate a small portion of its portfolio to the big names (only $eth and $btc). The important thing to consider is that it’s super early in the new cycle and that means there probably will still be at least a few months to a year of rather small moves until the big crowds come in again. The second consideration for crypto here is that next 4 year cycle will maybe be an adoption cycle where there is a 4 year move that peaks in the middle and ends at the current price. This market is so new that there isn’t much proof regarding longer term cycles.

From a cycles standpoint the timing for the low was last week or the coming weeks. So as I explained in the cycles article we do not know the exact price we’ll bottom at but if we don’t go lower in the coming 2-3 weeks then we can safely conclude that the 4 year cycle low has happened and then one can initiate a small position again in $btc or $eth.

$BTC Monthly

There is also no bias here from me. I’m just outlying the basics of the crypto market for the, sometimes ignorant, metal people. We all love the crypto hate tweets as metal guys and we’re all sad when crypto is at the high and they laugh with metals.

But as you can see there is an amazing buy opportunity every 4 years. And as highlighted above, there is again an opportunity like this that is presenting itself right now. Am I predicting a stupid price like 1million dollars ? No. I’m highlighting that from a cycles perspective we’re in the timing band to print another 4year cycle low. Which could be an entry point with a stop at the 4year cycle low and thus a well managed trade.

Keep in mind that for crypto there are also daily (60days per cycle) and weekly cycles. We are at a point where the bigger cycle decides, once per 4 years. Have we seen it yet, no idea. But we’re +- 1 month of from the exact lows of the upcoming cycle. The argument that we’re down 75% from the highs and thus crypto will never go up is not valid. Look at previous 4year cycle highs and then measure down to the lows it was always around 85%. So also this learns us that there might be a last spike to reach that 85% drawdown from the highs. But timing wise the cycle is ready to convert into a new cycle.

General markets

For the general markets we’re still in the bear trend and it is very hard to see where we are going. If the central banks do a decent job at managing the recession vs rising inflation then we’ll probably slowly keep dripping till $320 SPY as good buying opportunity. Or if we pivot sooner then we might break out above the blue downwards trendline and start the next bullrun. Again be open minded here guys. Just listen to the news and signals.

Thank you!

I want to thank all of you for reading the brief market update of gold and silver with a first introduction into how crypto cycles work. If you liked the content feel free to like, comment & subscribe/follow. Also feel free to like and retweet on twitter, it motivates me to keep going if I see a lot of engagement on twitter aswell.

Lastly a small poll :

Did you find it interesting to look at another markt like crypto with an open mind ?