Weekly Hot Take - Geopolitical issues
26/06-30/06
Welcome everyone!
Hello everyone, and welcome to another weekly update on the precious metals. We will discuss the consequences of the current decline and what to expect going forward.
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Precious Metals
XAUUSD
(Monthly)
Starting with the gold monthly view, we can see that we are trending towards the monthly EMAs. I’ve mentioned that the $1923 level is extremely important so ideally I want to see the monthly close above $1923 by end of next week. Afterwards I want to see another strong upwards surge as we go into the next 4month cycle. That next cycle should take us above $2077 into the $2100’s. I’m not bearish yet on the monthly view as we are still well above our monthly momentum indicators.
Let’s dive into the weekly now …
(Weekly)
The weekly candles show us a first big warning signal as we go below both EMAs while they are being pinched downwards. This is definitely a bearish signal. On the other hand we should be in an ICL window where the timing isn’t completely clear. We could be extremely close here to an intermediate cycle low on week 16. For me all that matters is that we do the necessary shakeout and regain $1923 strongly. We can see from previous ICL that we briefly went below both EMAs to then rocket back up so bulls have the hope here that we can regain both EMAs quickly! Ideally within the next week or two.
(Daily)
Looking at the daily candles I’m a little bit more worried while still respecting the larger timeframes to not get shaken out prematurely. To remain bullish on the gold cycle I want us to regain $1923 within the next 14days/two weeks. On the downside we got $1850 level coming and then the previous ICL low $1800 for if the prices really want to stretch to the bearish side.
XAGUSD
(Monthly)
Silver monthly broke the downwards sloping trendline which is obviously a bearish signal. We also broke below the monthly EMAs which is bearish. Given the geopolitical issues, which are usually good for metals, I want to mention the possibility that this is the final part of the shakeout before we revisit my important resistance zone at $26.11! If we were to break the $21.95-$21.61 area then I’m going to reduce position sizes and take a bearish stance again.
(Weekly)
The weekly candles show the big breakdown aswell as we are below both EMAs. Again obviously bearish signals. The next support is $22 zone and for me to remain bullish on silver I really want $22 zone to hold! Given the geopolitical issues that zone should hold, but upto the metals to prove this.
(Daily)
The daily shows the possibility for a postive divergent low together with the geopolitical catalyst to go back up. It’s kinda a now or never scenario here with silver close to $22. A move back to $24 within the next two weeks would be bullish. It’s too early to talk about targets for if we break $22 but then obviously the previous ICL is in sight. In my humble opinion, I don’t think we will get below $21.61 but its up to the charts to decide.
Summary
Gold showing first bearish signals; needs to regain $1923 within next 2 weeks.
Silver needs to rocket up off of its positive divergence on the daily candles.
Geopolicital escalation is coming just in time for metals to start the next cycle up.
Below for silver is the $22 support and for gold $1850 next.