From the Desk of Ian Culley @IanCulley

What will it take for gold to make new all-time highs?

A weaker US dollar and falling real yields are likely candidates for leading catalysts.

We can also add a significant unwind in commercial positioning to the list. 

Meanwhile, it’s a range-bound mess.

Let's stick to the basics. Uptrends – at the core – come down to more buyers than sellers. And risk-on/risk-off intermarket ratios provide excellent tools for tracking whether bulls or bears dominate a particular market.

After the recent bout of selling pressure, one precious metal risk ratio is approaching a potential inflection point…

From the Desk of Ian Culley @IanCulley

What will it take for gold to make new all-time highs?

A weaker US dollar and falling real yields are likely candidates for leading catalysts.

We can also add a significant unwind in commercial positioning to the list. 

Meanwhile, it’s a range-bound mess.

Let’s stick to the basics. Uptrends – at the core – come down to more buyers than sellers. And risk-on/risk-off intermarket ratios provide excellent tools for tracking whether bulls or bears dominate a particular market.

After the recent bout of selling pressure, one precious metal risk ratio is approaching a potential inflection point…

Check out the Silver Miners ETF $SIL versus the iShares Silver ETF $SLV:

The SIL/SLV ratio speaks to the risk appetite in the same vein as the Gold Miners ETF $GDX versus the Gold ETF $GLD.

SIL/SLV simply sits further out on the risk curve than GDX/GLD.

(A rising line indicates a risk-on environment, while a falling line implies de-risking behavior.)

The last time this ratio traded at these levels in early 2016, gold put in the low of its current decade-long base. And...

From the Desk of Ian Culley @IanCulley

All-time highs remain out of reach for gold bugs.

But not all is lost. In fact, I still see constructive consolidations on longer time frames. 

It’s messy. But I’m impressed with gold's and silver’s resilience as they twist and bend beneath supply.

But how low can they go before they break…

From the Desk of Ian Culley @IanCulley

All-time highs remain out of reach for gold bugs.

But not all is lost. In fact, I still see constructive consolidations on longer time frames. 

It’s messy. But I’m impressed with gold’s and silver’s resilience as they twist and bend beneath supply.

But how low can they go before they break…

For gold, I’m focusing on the prior commodity supercycle peak at roughly 1,924. 

If it loses those former highs, the key retracement level at approximately 1,825 highlights the next potential support area:

I like this level for two reasons.

It marks a former polarity zone, coinciding with last summer’s pivot highs and the March pivot lows earlier this year. And it gives gold room to dance.

Gold futures are simply shimmying within a multi-year range as long as they hold above the March lows. 

I imagine the gold bugs find the sideways action frustrating. Regardless, the bull case remains intact from an intermediate-term perspective. 

On the other hand, the bullish argument becomes increasingly thin on a break below 1,825 as the lower bounds of the...

The bears have found a new home: gold mining stocks.

Silver’s breakdown earlier this month raised the caution flag for the entire precious metals space. 

Less than two weeks later, gold futures and mining stocks are falling under the wrath of increased selling pressure. Precious metals bears are winning the battle as support levels fall to the wayside. 

Meanwhile, the bulls are reluctant to leave without a fight…

The bears have found a new home: gold mining stocks.

Silver’s breakdown earlier this month raised the caution flag for the entire precious metals space. 

Less than two weeks later, gold futures and mining stocks are falling under the wrath of increased selling pressure. Precious metals bears are winning the battle as support levels fall to the wayside. 

Meanwhile, the bulls are reluctant to leave without a fight…

Let’s review the recent action in mining stocks.

While I always prefer a price chart, I also like Grant’s moving average tables.

He measures the closing prices of all 30 components of the PHLX Gold and Silver Mining Index $XAU against (above or below) multiple moving averages, from five days at the far left of the table to 250 days at the far right.

This provides an excellent read on trends across multiple timeframes.

Here’s the table heading into the May 5 close:

A sea of green! Sellers hadn’t made their way to these mining names just yet.

Fast-forward a couple weeks, and the study presents a far different picture:

Red dominates the table across shorter time frames, displacing the...

The caution flag is flying.

Broad selling pressure is hitting the markets as gold, silver, and mining stocks slide.

Will the Fed hike? Will it cut? Or will it finally pause?

I have no idea, and nor does anyone else.

But gold’s crazy cousin has some definitive answers for precious metals bulls…

The caution flag is flying.

Broad selling pressure is hitting the markets as gold, silver, and mining stocks slide.

Will the Fed hike? Will it cut? Or will it finally pause?

I have no idea, and nor does anyone else.

But gold’s crazy cousin has some definitive answers for precious metals bulls…

The 24.75 level in silver marks the spot for the entire precious metals space.

Why?

Silver is the high-beta play. So if investors are pulling risk off the table, that key polarity zone in silver is most likely the first level to fall.

Last Wednesday, silver futures sliced through that critical level.

Note the bearish momentum divergence print on the 14-day RSI providing a poignant indication of waning strength. The bulls have stepped aside as the bears assume control. 

I have a neutral near-term bias for silver futures. Precious metals likely experience a range-bound choppy action as long as silver trades below the April pivot lows.

I will continue to focus on potential support levels, as I pointed out last week. It’s time to protect capital and recent gains.

Yet a few bright spots remain…

Despite...

From the Desk of Ian Culley @IanCulley

There’s a mountain of bullish evidence supporting an upside resolution in gold. 

But gold hasn’t broken out. Not yet!

Gold has been running this race for months... at least, that’s how it feels.

Perhaps it’s simply making its way to the starting line…  

I believe that’s the best way to view gold and precious metals at this stage of the game. Before I get ahead of myself – marking a series of upside objectives – I want to highlight a key level that defines my intermediate- and near-term risks…

From the Desk of Ian Culley @IanCulley

There’s a mountain of bullish evidence supporting an upside resolution in gold. 

But gold hasn’t broken out. Not yet!

Gold has been running this race for months… at least, that’s how it feels.

Perhaps it’s simply making its way to the starting line…  

I believe that’s the best way to view gold and precious metals at this stage of the game. Before I get ahead of myself – marking a series of upside objectives – I want to highlight a key level that defines my intermediate- and near-term risks…

Last week, gold futures came within five dollars of breaking to new highs:

Close, but no cigar.

There’s still plenty of overhead supply at those former highs at approximately 2,089. But bulls remain in control based on the bullish momentum regime and the clear uptrend off the October 2022 lows.

The three-point bearish divergence on the 14-day RSI might not paint the most bullish picture. You could even argue the momentum divergence increases the likelihood of a correction.

But I want to give the bulls the benefit of the doubt as long as price holds above...

From the Desk of Ian Culley @IanCulley

It’s still messy out there, no matter where you look.

Signs of strength are fleeting, whether we’re discussing gold, the S&P 500, or US Treasuries. It’s one of the few observations everyone agreed upon last week at the 50th annual CMTA Symposium. (I'll have more on that later this week.)

Despite failed breakouts and trading ranges ruling the market environment, one bullish data point stand out regarding precious metals…

Silver!

From the Desk of Ian Culley @IanCulley

It’s still messy out there, no matter where you look.

Signs of strength are fleeting, whether we’re discussing gold, the S&P 500, or US Treasuries. It’s one of the few observations everyone agreed upon last week at the 50th annual CMTA Symposium. (I’ll have more on that later this week.)

Despite failed breakouts and trading ranges ruling the market environment, one bullish data point stand out regarding precious metals…

Silver!

Check out silver futures finding support at a critical polarity zone:

The 24.75 level acted as support last spring before giving way to increased selling pressure. By the end of last year and into early 2023, the same price level became resistance.

This is the principle of polarity in action, as the forces of supply and demand continue to highlight the level’s importance. 

I have to give silver the benefit of the doubt as long as it holds above that critical level. 

The same is true for the iShares Silver Trust ETF $SLV, as the comparable price stands at 22.50:

Risks remain to the upside if SLV trades above the...