Weekly Hot Take - Silver fever
6/11-10/11
Welcome all!
Hello everyone and welcome to another weekly hot take! This week we will talk about gold trying to break the magical $2000 barrier after having confirmed a monthly close above $1974. Next to that, we will try to analyze why silver is still is locked rangebound. Make sure to read it till then end, as we will highlight an important divergence that is developing itself!
Precious Metals
XAUUSD
(Monthly)
The monthly candles show us the beautiful candle of last month, which recovered both EMAs and firmly closed right above the important $1974, which had previously pushed us lower. The next resistance remains $2000, followed by these ATH wicks. Further in the newsletter, we will highlight the strength of the GDX the past week compared to gold, so stick around!
(Weekly)
The weekly chart highlights the backtest we had to the important level, which again signifies the importance. In cycle terms, this should have been a half-cycle-low. Now we should continue higher and test the ATH wicks before making a daily cycle low. It happens often, definitely in stronger cycles, that a first daily cycle tests the highs of the previous weekly cycle. All in all, the cycle looks early and very strong.
(Daily)
The daily chart shows that $2000 is being heavily defended. The sooner we can break this $2000 level, the better. We do not want another replay of us failing to break $1974, which led to a big decline.
XAGUSD
(Monthly)
Silver is on all timeframes still struggling in this range around $23 dollars, this must be one of the longest times that silver consolidated sideways. I’m really curious to the power of the next directional move, as that should present fireworks. Sticking to our system, we need silver to break and close above the monthly EMAs before we can be fully bullish on the longer term timeframe.
(Weekly)
We have spent 31! weeks already in the $23 dollar area except for some spikes up and down. This is basically an extremely coiled spring waiting to be released. Respecting the systems, here we assume the same: Below the EMAs, release will be downwards. Above the EMAs we expect longer term upside.
Remarkable this week was the strength in indexes such as the $GDX!
GDX
(Weekly)
GDX weekly had a very strong week and formed a nice bullish candle! You can see that the EMAs are very pinched together and this means that a big move is coming, seeing golds strength I expect it to be to the upside.
Gold weekly closed minus -0,6% while gdx went +0,92% over the whole week. This is a first important divergence that we want to see! If this continues we’ll see a trickle down effect into the silver majors and then the silver juniors!
Until this trickle-down effect starts, the better plays are the high alpha plays that remain strong regardless of sentiment, only when silver juniors etf (SILJ) breaks out, that is when we will increase exposure even more towards silver beta plays!
Thank you!
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Have a great trading week!
GG