While Silver and the Miners can give us clues on where price is headed from time to time, they can also deliver their fare share of head fakes. I want to make it clear that Gold is the key driver for Cycles in the PM sector, even though Silver and the Miners can lead at times.
For that reason, many Cyclists only track Gold but the Miners do have their own cycle which can and does vary from Gold. One of the primary ways it varies is by Time, in that Miner cycles can often be shorter than Gold. Last year we saw several miner cycles in the 18-21 day range and I have GDX on day 18 today and today’s reversal candle may perhaps indicate that GDX found an early TC Low while the Gold Cycle may well stay within it’s normal 23-29 day band.
With that as background, Gold still has a bullish looking chart here as does Silver but I want to see Gold make a higher high in TC2 as day 8 is too early in my book for Gold to remain bullish longer term. Our AGQ position looks good for a run here as Silver looks strong here.
Much depends on the USD here for Gold, Silver and the Miners to move higher in the longer Intermediate Cycle. It looks like the USD, however, is not going to surrender without a good old fashioned fist fight. With its second close below the 50ma now, my expectations are that the USD’s move lower should start to pick up speed now but it really is putting up a fight here.
Added Footnote: I want to add that the inverse correlation between Gold and the USD does not always hold. Witness the move up in both after Brexit vote. So there can and will be times that the inverse correlation does not hold. That said, the correlation since the USD’s May 2016 IC Low has been quite visible and apparent to me. Getting the USD cycles correct will be critical to our trades in the PM sector for the near term horizon, IMO.