Briefly: Gold is likely to plunge below $1,000 this year and we’ve been writing about it for months. This article provides a list of critical long-term factors that one should be aware of if they want to invest in or trade gold, silver, and/or mining stocks. We include links to our previous premium analyses and we just made these analyses available to everyone.
But first, a quick short-term update.
There were a few important technical details that took place on Friday that confirmed what we had written previously. The USD Index broke above the rising wedge pattern and the medium-term reverse head-and-shoulders pattern, while silver closed (the daily and weekly close) below its July 2017 lows.
That’s a major breakout in the USDX and it’s likely to be followed by much higher price levels. The implications for the precious metals market are clearly bearish.
The same goes for silver’s crystal-clear breakdown in terms of weekly closing prices and another breakdown in daily prices. The volume on which silver declined was big on a relative basis and the white metal continues to move lower in today’s pre-market trading, which means that the breakdown is very likely to be confirmed. The implications are already bearish.
But the overall implications were extremely bearish previously, so nothing really changed. Consequently, our previous comments and the current investment / trading positions remain up-to-date. Therefore, instead of repeating what we wrote on Friday, we decided to do something different today.
The inspiration came after explaining the USD Index’s outlook along with some PM details. We were asked: So, is there anything else pointing to lower PM prices other than the USD Index? Our initial reply was that there were multiple very important reasons but for some reason we couldn’t recall more than a few of them. It turns out that when so many things are explained and written down, they seem obvious and they are removed from the active part of one’s memory (for the same reason, if you can’t sleep at night because you have so many things on your mind, writing them down to deal with them on the next day actually helps).
But, that’s not how it should be in the case of one’s investments. The prudent investor should always be aware of what the situation is along with the reasons for it being this way. Unless it’s clear what justifies a certain opinion, it might be an emotional view, not a logical justification. So, why do we really think that the precious metals sector is about to decline? There are indeed numerous important reasons and we gathered them in the following list. We discussed some of them recently, but some of them seemed “too obvious” to discuss them in the past few weeks. In some cases, we haven’t discussed a given issue in months.
Key Factors for Gold & Silver Investors
In today’s analysis, we will provide a list of key factors that are likely to result in lower precious metals prices in the coming weeks and months. Naturally, we’ll not discuss them from scratch, as that would imply writing a book. Instead, we will provide you with a list of links that includes the most important details that are important from today’s point of view and we’ll provide very brief summaries of each point. Let’s start with the big picture.
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