Wow! What a day Friday was. Janet Yellen’s Jackson Hole speech Friday morning set off wild swings in the currency and precious metals markets, as she indicated a more hawkish tone for U.S. interest rate policy.
The euro first collapsed and the dollar soared. Gold then soared and collapsed. Silver did the same. By the end of all the volatility, the dollar stood higher for the day, the euro took quite a hit, and gold and silver closed for the day flat or slightly negative but well off their highs.
This is great news for my AI models, proving that gold and silver remain on track for lower prices and the dollar higher, the euro lower.
However, gold did not close Friday below the $1,320 support and sell signal, closing just a hair above it. While silver managed to close below its sell signal.
Fractured markets are never a good thing. So we must be wary of an early bounce this week before the metals head any lower. Nevertheless, the trend is firmly down, following the model’s forecast nicely.
As soon as we get a close below $1,320 in gold, I will get more aggressive for you.
I am actually penning this issue at 7:09 PM Eastern time Sunday evening, watching the Asian markets open. Gold is down nearly $3, trading at roughly $1,319.50 and silver is down $0.18, trading at $18.55.
It’s very early, but it’s nice to see the downside follow-through in the Asian opening.
Remember: If gold can close back below the $1,320 level – we may see a complete collapse in the precious metals.
It’s also fascinating that the Dow Industrials keeps flirting with my 18,500 resistance level. We will have to watch it closely this week to see if it can pony up a monthly buy signal on Wednesday the 31st. According to my models, it should fail, and we should also see the Dow sharply lower into October.
I have answered all recent emails. So keep your questions coming. I’m watching the markets like a hawk. Hold all positions and related stops and I’ll keep you updated.
Best wishes,
Larry
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