In yesterday's analysis we dealt with silver and we explained why Wednesday's reversal was most likely just a pause within a bigger decline instead of an important reversal, which it might seem like at first sight. Indeed, it wasn't. Silver plunged and so did the rest of the precious metals sector, greatly benefiting our trading position.

In today's premium analysis, we will focus on gold and its price target. Or... should we say - targets. Based on how volatile yesterday's slide was, and how little a rally in the USD Index it took for gold to slide, it seems that there might be a short-term bounce in gold even before it reaches the target that we previously described. But, before moving to details, let's check how yesterday's gold price action caused the outlook to deteriorate even more.

The Gold Outlook Now

We previously commented on a specific analogy in gold. Namely, the price movement that we've seen since August is very similar to what we saw in mid-2016, early 2018 and early 2019. There were four tops after which gold declined. The very short-term implications were bearish regardless of which of those cases gold was repeating (history tends to rhyme).

The first two similar situations were bearish in the medium term, but the third (early 2019) one was followed by only a quick decline that ended above the previous lows and then a big upswing.

Yesterday's decline was particularly important, because gold moved and closed below the previous (mid-September) low. The same thing - breakdown below previous lows - happened in the first two similar price patterns, and it didn't occur in the third case. This means that we now have a confirmation that what we're seeing now is not like the early-2019 consolidation, but in line with the mid-2016 and early-2018 topping patterns. And what followed these breakdowns to new lows in these two most similar cases?

Big declines.

There was a counter-trend rally in late-2016 before gold moved to its yearly lows, but it was triggered by the U.S. Presidential elections at that time, and it seems that news-based volatility (trade wars, Brexit talks) is not likely to increase substantially here. In fact, it seems to be tapering off. So, while we could see a quick pause here, a big, sharp run-up seems unlikely.

In other words, based on the above-mentioned similarities, gold is poised to decline in the following weeks.

But that's not everything. Please take a look at the volume levels. Gold's volume was declining on average since August until the very recent slide, when the volume soared to levels that were not seen in years.

That's exactly what happened in 2016. The volume was declining on average, while gold was topping (through four local tops, similarly to what we saw recently), but it soared during the breakdown below the previous lows. This makes the late-2016 decline more similar to the current situation than what we saw in 2018. Gold also declined in a more profound and sharp manner in 2016 than it did in 2018. Consequently, gold's short-term outlook is not only bearish, it's very bearish. Of course, this doesn't mean that gold has to slide right away - a couple of days of sideways trading or even a small bounce wouldn't change anything regarding the above.

Let's take a "breather" from the gold analysis for a quick look at the USD Index.

USD Index Rising

The USD Index moved higher, but the rally was not that big. The USDX is more or less halfway back after the October decline. If gold's performance relative to the USD Index was neutral, gold should be more or less in the midpoint of the recent decline. Instead, gold just closed at a new low. This is a critical confirmation of gold's weakness.

Gold is not showing strength by declining to just its previous lows (slightly below them). Gold is multiplying the bearish signs that it gets. It had little direct reason to break below the previous low yesterday. But it did anyway. Why? Because the bearish storm has been brewing for a long time. As the number of shocking news announcements is lower, the situation is probably going to develop just as it's been likely to, and just as we've been warning for many weeks.

Going forward, gold will not need big reasons to decline. Of course, bearish news will accelerate the decline, while bullish news will trigger pauses, but gold is overall likely to be in the decline mode for longer than most investors expect.

We hope you enjoyed reading the above free analysis, and we encourage you to examine today's Gold & Silver Trading Alert - this analysis' full version. We supplement the above with two specific target areas for gold that could be reached this month or in December. Additionally, we explain why silver or mining stocks didn't break below their recent lows yesterday and what it implies for the path ahead. Of course, we provide target prices not only for gold, but also for silver, mining stocks, and related (leveraged) ETFs. Please keep in mind that thanks to the current promotion, the first 3 weeks of your new subscription will be for just $9 (renews normally, but you can cancel anytime). Get the critical details as well as full 3 weeks of follow-ups - subscribe today!

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Silver plunged on Tuesday, just as it was likely to after the triple reversal that we've been writing about, and it was declining strongly during Wednesday's pre-market trading. And then it all changed. Silver soared before the U.S. markets opened and the white metal ended the session in the green. We definitely saw a silver reversal. But, was it significant and can it be trusted?

We doubt that and the below chart shows why.

About That Silver Reversal

We doubt the significance of yesterday's reversal in silver, because daily corrections after the big daily declines are not something that indicate a reversal. Conversely, it's something normal.

For instance, the intraday reversal that we saw in early February should have been - theoretically - followed by higher prices. It wasn't. It was simply a breather that silver took before continuing to decline. These daily pauses don't always take the same form. In late February, silver corrected by simply rallying a bit without an intraday reversal. And in late September, silver's pause took form of a significant slowdown in the pace at which silver was declining.

In all above-mentioned cases silver resumed its decline shortly. So, is this time really any different? That's unlikely.

Besides, silver had a good reason not to decline without looking back. The rising support line that's based on the previous lows in terms of closing prices (May and July lows) was just reached in intraday terms. Since the line is based on daily closing prices, and we didn't see a daily close below it yesterday, we don't view yesterday's price action as invalidation of the breakdown. The support held for now, but that's not enough to make the outlook bullish.

Moreover, let's keep in mind what we wrote in yesterday's Gold & Silver Trading Alert about the size of silver's decline so far:

Silver declined profoundly and it seems to be just starting its decline. Silver has recently outperformed on a very short-term basis after having formed a shooting star reversal. It doesn't seem that just a one-day decline or something only a little bigger than that is enough to really be a reasonable response to multiple strong sell signs. Similar signals in the past used to be followed by multi-dollar declines.

The move that we've seen so far, is too small even compared to the lesser silver declines. And if we compare it to silver's bigger declines, it's almost nonexistent.

Even if we consider yesterday's pre-market downswing to be a part of the decline, the entire move is still tiny compared to even the smaller of the previous declines. Taking this comparison into account it's even more likely that yesterday's reversal was not the end of the decline in silver but rather a pause within it.

All in all, predicting higher silver prices here based on yesterday's small reversal is not justified - at least not yet.

We hope you enjoyed reading the above free analysis, and we encourage you to examine today's Gold & Silver Trading Alert - this analysis' full version. We share the analysis of yesterday's price movement in gold and mining stocks, discuss their volume levels, relative sizes of the price moves. The extra detail that most investors will probably miss comes from the Stochastic Oscillator applied do the GDX ETF. As it turns out, the very recent top is much more important than it appears at first sight...

Most importantly, the premium Gold & Silver Trading Alert includes the specific exit prices for gold, silver and mining stocks necessary to truly take advantage of the upcoming short-term downswing. Please note that there's no risk in subscribing right away, because there's a 30-day money back guarantee, and because we currently have an extremely favorable promotion - the first 3 weeks of subscription are for just $9 and it renews normally only after that time. Naturally, you can cancel it anytime should you choose to do so and the same offer applies to all our other products. Get the precise profit-take levels for gold, silver, and GDX ETF and all the premium extras - subscribe today!

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In yesterday's analysis, we explained that gold's decline is likely to continue, and we uncovered the reason behind the recent strength in silver and mining stocks (the general stock market). We also told you that the influence that the main stock indices have on silver and miners wanes off over time. We didn't have to wait long for the market to agree with us. Gold took a deep dive, and both: silver and mining stocks moved considerably lower yesterday, even though the move lower in the S&P 500 was tiny.

The Diving PMs

It happened right after the triple triangle-vertex-based reversals that we described days in advance. Just when people were thinking that gold might be moving higher, it declined and erased all its recent gains. It closed almost right at the lowest closing price of October (just $0.20 above it).

Silver didn't close as low as it did in October, but silver's decline continues also today, and it just moved below the mid-October low in terms of the closing prices.

It also moved below the rising support line that's based on two October lows. The breakdown was not confirmed yet, but it already (until it's confirmed, it's just a slight indication, but still) suggests that this decline is not over yet.

How low can the precious metals sector go? Well, you know very well that we expect gold, silver, and mining stocks to move much lower in the following months. However, we don't intend to keep the speculative trading positions intact during all this time. Of course, some investors and traders may want to do so, but that's not how most people prefer to approach this move. We want our trading Alerts to be very useful regardless of whether one agrees with us on precious metals' long- and medium-term moves.

So, yes, we continue to think (based on multiple factors) that the following months will see much lower precious metals values, but at the same time, we aim to profit on the more short-term price swings. And how are we going to do that? By aiming to detect the short-term turnarounds. And the next short-term turnaround is likely coming - and it's likely to take place before the end of this year.

Yes, the above prediction is also based on the vertex-based reversal technique that just worked so flawlessly in detecting the recent top. But getting the right exit price for exiting the position that gains along with lower PM prices is not as straightforward as detecting the likely timing of the reversal.

Most of us heard the saying that when the time is up, the price will reverse. It's all well and nice, until one realizes that the reversal might mean both: the bottom that one expects to see, the corrective top that takes place after the bottom that one wants to detect, or even the corrective top that takes place before the bottom that one wants to detect. Getting out much too early or much too soon means missing out on a lot of profits, which is why getting the price prediction right is a big deal. If both the price and time aspect of the forecast confirm each other, we'll likely have the meaningful reversal and a great exit price. If not, things can get costly. On a side note, this is why it's so useful to have professional daily and intraday updates reflecting the ever developing situation.

So, what's the right price here?

We will reveal the details in one of our free analyses eventually, but we think that the juicest fruits of this trade should be reserved to our subscribers. After all, they are the ones that allow us to analyze the market really thoroughly and feature predictions using techniques that nobody else has. We don't accept any advertising (especially from mining companies that want to be "promoted") and we are 100% supported by our subscribers. This ensures that 100% of our thanks, loyalty and care goes to our subscribers.

We would like to invite you to become a part of this noble group. We realize that you may not be inclined to pay the full subscription price before giving it a shorter test drive, so we have an idea. In short, we'll make being our subscribers quick and easy. Namely, for the first three weeks, we will provide you with our Gold & Silver Trading Alerts for just $19 - that's a tiny fraction of the subscription value. The subscription will renew normally, but you have full three weeks to evaluate, and profit on it. Naturally, you can cancel it anytime should you choose to do so.

We are applying similarly ridiculously low prices for this very short time for our other services as well. That's excellent time to check out our new fundamentally-oriented service: Fundamental Gold Reports, and it's just as great opportunity to try our Day Trading Signals, if day trading is (or might be) your thing. We just recorded another profitable trade in the latter, which is a great addition to the results from gold, silver, and miners' decline featured in this analysis. Forex- and Oil Trading Alerts have also been particularly profitable this year, so why not give them a go at the fraction of their value? Who knows, perhaps the profits on all these markets in these three weeks will make seem the price of even the All-Inclusive Package as very low (in comparison).

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In yesterday's analysis, we wrote that there were some positive signs for gold and mining stocks, but that one should not take them at face value. We also mentioned that the potential upside for gold was relatively limited to the late-September top, and that the outlook didn't really stop being bearish. The preceding rally - we stated - actually had bearish implications because of the triple triangle-vertex-based reversal. And what did the precious metals market do? It declined right after the reversal.

Examination of the PMs Reversal

Gold declined only a bit yesterday, but the move continues in today's pre-market trading at the moment of writing these words.

And it was not only gold that declined. The move in silver was negligible, but the mining stocks declined rather profoundly. To be clear, the move was not huge on a stand-alone basis, but given the relatively small decline that we saw yesterday in gold, miners did move significantly.

The HUI Index declined, erasing the daily strength that raised bullish hopes at the end of October. It also closed well below the previous intraday high and very close to the October 25 closing price. Moreover, it closed in the proximity to the 38.2% Fibonacci retracement. Gold didn't do the above, which means that miners' short-term outperformance is likely over. This means that what seemed as something that could indicate further gains, was most likely nothing more than a short-term price noise.

One of the reasons behind strong performance of mining stocks could have been the recent rally in the general stock market. Let's take a look at our Correlation Matrix for details.

The 10-trading-day column for HUI / S&P 500 Index shows significant correlation of 0.71. Why? Because in the last two weeks, two markets have been moving in tune with each other. "Correlation doesn't imply causation" is generally true, but in this case it's quite obvious that the entire market (dog) influences how a part of the market - gold stocks (tail) moves (wags).

Please note that the analogous reading for silver is 0.76, which also explains to some extent why silver was reluctant to decline recently. Silver has many industrial uses, so in the short run it's likely to move in tune with stocks every now and then. That's the case, because increased demand for silver from companies that use it can be linked with overall good performance of these companies, which in turn is linked with how the stock indexes such as S&P 500 perform.

One would expect this relationship to wane over time, because ultimately silver has its own supply and demand combination that determines its prices. And indeed - as we move further to the right in the above table, the Silver / S&P 500 correlations become (on average) lower and finally move into the negative territory in case of the very long-term correlation coefficients.

Let's move back to the mining stocks. Maybe it was a coincidence that the HUI Index declined and other proxies for the miners don't confirm it?

The truth is exactly the opposite.

The GDX ETF declined even more on a relative basis and it closed below the October 25^th closing price, thus invalidating the breakout above it. The volume was not extremely high, but it was not low either, which is exactly what one might expect to see at the beginning of a decline.

We hope you enjoyed reading the above free analysis, and we encourage you to examine today's Gold & Silver Trading Alert - this analysis' full version. We dig deeper into the mining stock sector by examining junior miners, we discuss the implications of the recent rally in platinum, and - most importantly - we feature the details necessary to truly take advantage of the upcoming short-term downswing. Please note that there's no risk in subscribing right away, because there's a 30-day money back guarantee. Subscribe today.

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Gold price action in November 2019 is likely to take most investors by surprise. There are two ways in which gold is likely to move in the first part of the month. It could slide right away based on the triple triangle-vertex-based reversal patterns that we see in gold, silver, and gold miners. However, there's also the possibility that gold will rally along with the Japanese yen (as it often does) and move close to its late-September high. These two scenarios are interesting, but they are neither the most appealing, nor most important thing that we'll explain today.

In case of technical analysis, it is usually the case that one never asks the W question. There is no WHY in the technical analysis. Or more importantly, they usually don't matter. There are tens, if not hundreds, of news releases each day and markets can rally or decline on all or any of them. It's impossible to pay attention to everything that each market is doing (some analyses can help, though), and it all boils down to whether a given support or resistance was reached, whether the turning point or cycle is nearby, if we see an analogy to the past to any significant extent. In other words, there are multiple tips for trading gold that are not concerned about the WHY.

Today's analysis is different from other ones that we wrote recently. Today, we're going to focus on the why behind the two short-term scenarios from the opening paragraph. The reason is that the implications of the reply to the W question extend way beyond the next several days. These implications made us supplement the target prices for our trading position with additional details, making it much more short-term oriented, but even that's not the most important thing. The key implication is that based on the reply, the likelihood of seeing a major turnaround in October 2020, and its combination with True Seasonal patterns for gold, we adjusted the likely gold price path for the following 12 months.

Let's start with the tip of the analytical iceberg.

The Short-Term in the PMs

Gold broke above the declining green resistance line and is confirming the breakout right now. Just one more daily close above the green line (currently at about $1,500) will mean that the breakout is verified, making a short-term rally more likely. Gold stocks have already broken above their declining green resistance line and they verified this breakout by closing above the line for three consecutive trading days.

So, did the short-term outlook just become bullish? Not really. The rallies do appear bullish, but the triple triangle-vertex-based reversal means that any rally that took place recently is actually bearish news for the following days. After all, if the price is likely to reverse (again, it's not just one market that points to a reversal, it's all three of them), then it's likely to decline only if it moved higher before. And that's exactly what happened.

Then again, keeping in mind that the reversals can work on a near-to basis, it means that we could first see one or two days of higher prices before the precious metals market slides next.

If gold moves higher instead of declining, then how far can it go? To the next resistance level. Since gold moved above the 50% Fibonacci retracement level on a day-to-day basis, it could move to the 61.8% Fibonacci retracement at about $1,530. Alternatively, gold could move even higher and rally to approximately the late-September high at about $1,540.

Of course, we're writing "gold", but what we really mean is gold futures prices as that's what the above chart is showing. Friday's intraday high was $1,519, so the above means a possibility of moving beyond it by about $10-$20.

That's it? I was expecting to see something groundbreaking here, and the above seems relatively normal...

Don't worry, that was just a warm-up, and something that needed to be covered anyway. What is the most important detail here is the shape of the recent gold price movement. We've already seen it before. In all likelihood, unless you've become interested in gold only recently, you've already seen it before too. It's not that obvious at first sight, because the time scale is different, but... The way gold is topping right now, it's an almost exact copy of how it topped in 2011.

Let's take a look at the above chart one more time, but this time, we will put gold's 2011 performance before it (so that it's easier to compare it with gold that takes the upper part of the triple chart).

The Anatomy of Gold Tops

The similarity may not be obvious at first sight thanks to the different time span, but please focus on the following facts:

• Both rallies in gold (2011 and late-2019) had a short-term consolidation in the middle of the rally.
• Both rallies had an initial (early August 2011 and early August 2019) tops, which were followed by a double-top pattern in which the second high was a bit higher.
• The initial declines (late September 2011 and early September 2019) were quickly followed by counter-trend rallies (November 2011 and late September 2019 tops) and then additional declines to new short-term lows (December 2011 and early October bottom).

What followed about 8 years ago was yet another upswing that ended a bit above the 61.8% Fibonacci retracement and very close to the initial high (November 2011). The history has been repeating itself to a considerable degree, which means that gold might rally to $1,530 - $1,540 once again).

It is not carved in stone, though. The history might rhyme instead of being repeated to the letter, which means that this time, the upswing might be smaller (or higher, if gold really wants to trick a lot of people in a late-Halloween fashion).

If the history is indeed repeating here, it's necessary to ask: What happened next?

Gold declined to the previous lows once again, and then launched yet another counter-trend upswing from there. The most recent decline ended at about $1,460, so it might be the case that this level will provide gold with strong support once again, and that we'll see yet another counter-trend rally.

And what if gold declines right away from current price levels? Then it changes absolutely nothing with regard to the above. The 2011 topping pattern and what we've seen in the past several months would be similar nonetheless, with the implication that we're likely to see a counter-trend rally once gold moves to about $1,460 anyway.

Hmm, is there any other reason, besides the price shape, that makes this year similar to 2011?

You bet! The most important similarity between the two years is the record-breaking monthly volume that ended both rallies. We saw something similar also in January 2018 (that was the yearly high in terms of the monthly closing prices). The implications of the big volume spike are bearish, as they emphasize the importance of the reversal that took place during a given month. As far as the similarity is concerned, out of these two cases that are similar volume-wise, only the 2011 top was preceded by a rally that was similarly sharp to what we saw in the middle part of this year.

Consequently, it's not just the shape of the price during the 2011 topping process that makes both situations similar - volume readings confirm it too.

All in all, gold's price in November 2019 might move higher initially, only to disappoint shortly thereafter. Gold could move to its recent lows in November, or this short-term decline could end closer to mid-December. The latter seems more likely.

We hope you enjoyed reading the above free analysis, and we encourage you to read today's Gold & Silver Trading Alert - this analysis' full version. It covers the USD Index and Japanese yen's message for gold and silver investors. Don't miss the discussion of the detailed gold price path - the looming triple (!) reversal clearly confirms it. We can't give out all the details, but they're literally worth their weight in gold and you really want to know them. Please note that there's no risk in subscribing right away, because there's a 30-day money back guarantee for all our products - we encourage you to subscribe today.

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