In our last dedicated Update on Gold and Silver in April, we noted that gold had reached our Fibonacci target of 2466.50 but could have further to go.

GC is fairly straightforward. There’s a large IH&S pattern which completed around Mar 7 targeting 2557, a short distance above the white 1.618 at 2466.50.

GC reached 2557 this morning.

It’s interesting that it’s reaching overhead resistance at the same time as SPX and at the same time that DXY has reached our next downside target.

continued for members…

First, let’s take a look at the overall market. Futures are barely positive… …at the same time that SPX has backtested its broken white channel and reached its .886. A pullback to the .786 or even to close the gap at 5463.22 would make perfect sense here. As mentioned above, DXY has reached our downside target – meaning that EURUSD is likely to reverse, a negative for stocks. USDJPY continues to flounder in a range that is net bearish for stocks.Oil and gas are pushing lower, which is positive for interest rates and stocks. But, they theoretically have a long way to go if they’re to make a big difference in the next couple of months. Now, back to gold and silver. Gold’s IH&S completed way back in February. As we noted then and in April, if the 2557 target it topped, then the white 2.24 and 2.618 come into play at 3018 and 3344. But, the only way that scenario makes sense is if oil/gas prices head much higher.

Silver has been on a very different path. Instead of making new highs, it has been struggling to reach overhead resistance. It bounced prior to reaching its SMA200 and just pushed above its SMA50 and broke out of a falling wedge.

But, it usually slumps at the same time or shortly after GC does and has also reached the midline of a channel (at 30.6-31.0) that has ended multiple prior rallies. That said, if it can push above 31 it has potential to 33.73 or even 35.23.

It’s interesting that these higher targets correspond with the projected timeline of our CPI projections: a decline into October/November followed by a surprising increase.

Stay tuned.