By Elliott Wave International
First, gold prices plummeted 4% then 5% then 6% below $1300 per ounce to their lowest level in nearly three years. Soon, silver followed in an even steeper drop below $20.
- Fears of the Fed starting to twist shut its QE tap are anything but new. Gold and silver investors have had months to digest this potentiality.
- Not to mention the fact that the June 19 minutes made no direct mention of actually stopping its bond-buying program. FED Chairman Ben Bernanke was hypothetical at best, saying, “IF the incoming data are broadly consistent with … and remain broadly aligned with our current expectations … it would be appropriate to moderate the monthly pace of purchases later this year.”
- And, last, gold and silver prices did not fall immediately after the FOMC minutes were released. In fact, they rose. Headline: “Gold Prices Show Muted Reaction To Upbeat Fed” (Mining.com)
“[Gold]’s overall trading remains weak. The bounce we noted last evening is over…. A decline through $1373 should indicate that wave __ of __ down is under way. The downside potential indicates at least a sell-off into the $1250-1300 range.”
“[Silver] remains weak and prices appear on the verge of declining to new lows beneath $20.07…. Our near-term stance remains bearish.”
Gold and Silver Defy Bulls’ Optimism
Gold and silver have been all over the financial news.
On Thursday, June 20, silver fell below $20 (-60% from 2011 high), and gold fell below $1300 (-30% from 2011 high).
We first published the chart below after metals plunged in mid-April. It shows EWI’s forecasts not only leading up to those big moves … but during the past three years of opportunity.
Three years of volatile price action in these two markets is plain to see. And the forecasts speak for themselves.
Overwhelmingly, most metals experts favored the other side of the gold and silver trend for the past three years – and they still do today. Meanwhile, EWI subscribers were prepared ahead of time for nearly every important turn.
Now, some periods are more vexing than others. But currently we are in a period where the wave patterns are particularly clear.
Metals prices may bounce higher near-term – like we warned they would do after the April 16-18 lows – but the quotes on the chart clearly show how countertrends are the source of opportunity. And that is the great strength of pattern analysis via the Elliott wave method, along with tools like sentiment, momentum and price.
For a limited time you can see the full story in metals in a free report from EWI. See below for more details.
|FREE Gold Video from Elliott Wave International
Elliott Wave International forecasted nearly every major trend and turn of the past three years in gold and silver. If you invest in precious metals, you owe it to yourself to see how we got to where we are today. In a 10-minute video titled Gold Defies Bulls’ Optimism, Elliott Wave International’s Chief Market Analyst Steve Hochberg lays out what has transpired in gold since 2011 so you can understand where it’s headed next.