Gold Upswing and Lessons from Gold Tops / Commodities / Gold & Silver 2019

Whata classic day Friday was! Gold moved a bit lower, miners moved significantlylower, and silver rallied. Truly classic and outstanding performance if oneenjoys seeing topping patterns that are playing out according to their usualand likely characteristics. And Monday’s early session seems to be an encore.

Let’sstart with the examination of the most recent price action in gold.

Whatwe just saw could have been the final of the three tops that is then likely tobe followed by the biggest decline of this quarter. That’s what goldseasonality in Q4 2019 supports too – we’re in for quite a volatilemove lower before any short-term corrective upswing starts.

There’sone more thing about the goldchart to comment on. The above chart features in greater detail whathappened recently, and the one below features the not-so-long-ago past –late-2018 price performance.

LessonsFrom Gold a Year Ago

Bothpatterns started with a sizable daily rallyin gold that took place on big volume (October 2018 and earlyDecember 2019). Then gold entered consolidation with a small breakout that wasthen invalidated. Gold recovered and went on to make the third attempt to breakhigher, but failed. What’s notable about these final attempts is that we saw aday with very low volume (early November 2018, and the last few days). Back in2018, this pattern was followed by several days of visibly lower prices beforegold rallied.

Somethingsimilar could – and is likely to – take place also this time. The end of theyear is likely to mark a reversal, which means that gold could bottom at thattime and start a corrective upswing. The difference this time is that thefollow-up rally that would take place in January is not likely to be assustainable as the one that started in mid-November 2018.

Havingsaid that, let’s take a look at the silver market.

Turningto Silver

Thewhite metal has indeed shown strength by rallying back to the rising resistanceline and the 50-day moving average. It almost moved above the early-Decemberhigh on Friday. It finally managed to break above it in Monday’s pre-markettrading.

Silverhas shown exceptional strength and soared to new monthly highs. This means thatit also broke above its 50-day moving average and the rising resistance line.This would have been a very important and bullish development if…

Ifit wasn’t silver. The white metal can be counted on to provide fake signalsover and over again, and one of the ways to tell if silver is likely lying isto look at what the rest of the precious metals market is doing. If gold is notbreaking higher and if miners are underperforming, it’s very likely a fake moveon silver’s part. The above is one of the most important tradingtips for the gold market. There are many techniques that areuniversal, but this one is specific – and highly useful – in case of the PMs.

Wealready know what happened in gold – it didn’t break above the previous highs,at least at the moment of writing these words. And what about the goldminers?

TheMiners’ Turn

OnFriday, miners confirmed their breakdown below the rising support line. It’shard to imagine a clearer sign that silver’s breakout should not be trusted.

Rememberthe two, three tops in gold?In miners we can only see two of them, right? You know why? Because miners arealready in the decline mode.

Justas it’s usually the case, miners were the first to rally and silver wascatching up. Again, that’s a classic topping performance in the precious metalsmarket.

Thedynamics of other precious metals’ sectors or the lessons from theirseasonality are far from the only defining elements in gold price development.The USD Index moves and the key factors at play are another important pieces ofthe puzzle. This is what the full version of the analysis covers – plus thetargets of our promising short position. We encourage you to join oursubscribers and reap the rewards. Subscribetoday!

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Thank you.

Przemyslaw Radomski, CFA

Founder, Editor-in-chief

Toolsfor Effective Gold & Silver Investments - SunshineProfits.com
Tools für EffektivesGold- und Silber-Investment - SunshineProfits.DE

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All essays, research and information found aboverepresent analyses and opinions of Przemyslaw Radomski, CFA and SunshineProfits' associates only. As such, it may prove wrong and be a subject tochange without notice. Opinions and analyses were based on data available toauthors of respective essays at the time of writing. Although the informationprovided above is based on careful research and sources that are believed to beaccurate, Przemyslaw Radomski, CFA and his associates do not guarantee theaccuracy or thoroughness of the data or information reported. The opinionspublished above are neither an offer nor a recommendation to purchase or sell anysecurities. Mr. Radomski is not a Registered Securities Advisor. By readingPrzemyslaw Radomski's, CFA reports you fully agree that he will not be heldresponsible or liable for any decisions you make regarding any informationprovided in these reports. Investing, trading and speculation in any financialmarkets may involve high risk of loss. Przemyslaw Radomski, CFA, SunshineProfits' employees and affiliates as well as members of their families may havea short or long position in any securities, including those mentioned in any ofthe reports or essays, and may make additional purchases and/or sales of thosesecurities without notice.

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