Gold's ‘Overbought’ Signal is a Trap, Here's Why It's Screaming Higher | Gary Wagner
Summary
Market Volatility: The podcast discusses the extreme volatility in the market, particularly focusing on the precious metals sector, with gold and silver reaching new highs before being impacted by a rally in the US dollar.
Gold's Performance: Despite a temporary setback due to a stronger dollar, gold futures surged past $3,800, with technical analysis suggesting a strong upward trend driven by consolidation rather than correction.
Silver's Breakout: Silver also experienced significant gains, breaking through $45, with discussions on its potential to reach all-time highs around $50, highlighting its recent catch-up to gold's performance.
US Economic Data: Revised GDP growth figures and a strong dollar are influencing market dynamics, creating a complex backdrop for precious metals, with debates on whether the bullish sentiment will continue.
Fed's Dovish Stance: The Federal Reserve's dovish signals are seen as supportive for gold, despite conflicting signals from the bond market and internal disagreements among Fed governors.
Technical Indicators: The podcast highlights the importance of technical indicators like the RSI, which shows gold as overbought, yet suggests that strong fundamentals could sustain higher prices.
Investment Outlook: The discussion suggests a bullish outlook for gold and silver, with expectations of reaching $4,000 for gold by early next year, contingent on persistent economic fundamentals.
Market Sentiment: Despite concerns about potential bubbles, the overwhelming bullish sentiment and strong demand for gold across various investment vehicles are emphasized as key drivers of the market.
Transcript
[Music] Welcome back to Chart This. I'm Jeremy Saffron. It's been a week of extreme volatility, a tugofwar for the market driven by an increasingly chaotic economic picture. Now, early in the week, precious metals exploded higher with gold futures uh surging past $3,800 to a new all-time record and silver smashing through $45 and it's still up about 50% this year. But this bullish narrative was thrown into disarray by US economic data that should have been a kryptonite for gold. GDP growth has been revised sharply higher to a blistering 3.8% annualized pace, the fastest in nearly 2 years. Now, this news triggered a sharp rally in the dollar, knocking gold and silver back from their record highs. Now, this creates a fascinating background. The critical question on everyone's mind is which force will win. In fact, we put a similar question to our KitKo news audience in a poll last week that received nearly 6,000 votes. Uh, so thank you to everyone who chirped in there. An incredible three out of four of you. 73% said we're headed for a new all-time high above $4,000 an ounce. So, is the audience on the right track? Here to make sense of the charts is one of the best technical analysts in the business and our very own Gary Wagner, of course, editor of the goldfor.com. Gary, welcome back. Thanks for joining us this morning to break it all down. Uh, appreciate it. Thanks for having me. These are truly uh historic and exciting times, so I'm glad to be here. Yeah. Yeah, of course. And you know, it's been a minute, not too too long. We had you on almost a month ago, August 28th, and you were remarkably accurate on metals, calling the breakouts in both gold and silver, but your bearish dollar call was the challenge. And you know, it's it's kind of some incredible resilience there. That resilience was on full display this week after gold hit that record. As I mentioned, 3,800 knocked back hard down on that dollar rally. From a technical perspective, was that just a, you know, a healthy consolidation after a powerful breakout or we seeing signs of a failed breakout and potentially a bull trap? In the dollar, you mean? Yeah. Yeah. The the the dollar has been a a quandry. Um there's so many forces, dynamic forces that are working uh against each other that it's amazing. I believe that the dollar has held up as well as it has, but it has been strong and it has been resilient unquestionably. I wouldn't be surprised if it weakened a little bit. But there's underlying support that's phenomenal. Let's see if we can uh pull up a dollar chart here. If you take a look at recent activity, you can see how strong it has been really since the 17th when it was the index was at around 96. Now it's back to uh well over 98 about 98 and a half and major resistance doesn't really come in till about 100 and that's based on these tops that came in back in August. So we're seeing some real resilience because what we've done is we've broken out of the consolidation range which is the range that was the way best way to characterize it from about the middle of August through the beginning of September. You had these lows at around 97 and 40 and then highs at around 98. So, it was caught in this range and now where we're at here, we are still just below these tops right here. A break above these on a technical basis means that there really isn't any resistance back until 100 on the index. So, interesting time ahead, interesting times ahead with the dollar, unquestionably. Yeah, no kidding. And of course, we saw that dollar snap back this morning. Obviously a drag down gold and silver a little bit, but I mean gold has snapped back here. I mean, the last time I looked it was at 37.80 on the futures and and how do you see the chart? I mean, you know, silver still back too, but let's start with gold. Well, when we look at gold, what we've got to realize is that we recently, and when I say recently, at the 23rd, so on Tuesday of this week, we hit the all-time record high. Let me move this out so we can take a look at the high. The high that came in was actually 3823. That's this small wick right in here. And so the fact that it didn't close at 38 or above doesn't surprise me. What I would like to see and what I believe we could see is what we've been seeing recently. we get these big spikes to the upside near parabolic moves and then a couple of days of consolidation where it's trading sideways as you can see right here and then it will spurt up to the next level. Here's 3672 and then for 4 days it trades sideways. What we're not seeing on this entire run is any kind of real correction. And that to me is what is most impressive is the fact that it runs up and rather than correcting and selling lower, it trades sideways, meaning it's consolidating. And that is a sign of strength. When we look at the action between the 20th of August and current pricing, the longest time that gold is sold off, meaning consecutive days, has been 2 days, that was Wednesday the 17th and Thursday the 18th, and then it springs up to this candle, which is an all-time record close, an all-time record intraday high. So, exceedingly exceedingly strong. I think personally I wouldn't be surprised if it consolidates and then moves higher. I'm still bullish on gold unquestionably. You know, we've been seeing that massive price range, you know, that volatility we talked about. Has the volume confirmed this action? I mean, was the initial selloff that we kind of saw um you know, based on this this economic news, was it was just heavy panicked volume and and more importantly, is this recovery back toward the highs happening on an equally strong convincing volume? I mean, what's the volume telling you about who's winning this fight? Well, let's pull up the volume. And when we do, you can see that the the volume is pretty strong. Yeah, it's maintained a consistency of strength. If you look at the strength of this volume, the volume for summertime volume especially has been exceedingly strong and consistent. You're not you're getting some spikes like you did here. And this is of course a day in which we had what about a $60 plus dollar rise. But other than that volume has been very very steady and that is impressive especially because we're witnessing this during these summer months of trading when typically the large institutional traders take time off and vacation. We're not seeing that right now. Yeah. What's your outlook for the next month? I mean after that rejection from the highs what's the key support level that gold must now kind of hold to prove that this is not just a pause and it's not the end of the run support level it's because we are in record territory we the support levels major support is really low it's around 3500 I don't even count it then 3600 and it's only based on these a couple of days of consolidation with major support 36 662237 $3,700 to me is major support right now. Yeah, Gary, I mean, the days you and I covering this since 1750, $2,000 gold. I mean, I can sit here and remember talking about it. Here we are looking at that chart. I got to ask you, I mean, the the Fed has signaled a dovish path, which is typically rocket fuel for gold. I mean, the bond market seems to be calling their bluff. Yields are at 3-we highs and the traders are actively reducing their bets for an October rate cut. From a purely technical perspective, which signal is more powerful for the gold chart right now, the Fed's doubbish talk or the bond market's hawkish action? I I'm going to have to go with with the Fed. Yeah. Because buy on rumor or sell on facts seems to be something that still holds true now for the Fed. And the comments that Chairman Pal made on Tuesday are amazing in which he talked about a dichotomy or a difference between dealing with the problems of inflation which are still spike but at the same time dealing with a sl a sluggish labor market. and the method to deal with the labor problem is the exact opposite of what he does to deal with inflation. And he was talking about that when he um had it wasn't a conference, but he did have a opening speech and then he was interviewed in which he said that it's unusual for us to have these two issues at the same time and both of these issues call for different action by the Fed. So what they're doing is weighing which one seems to be the more prevalent problem and which way to attack it. which means that the Fed is really in a precarious place because it's not a straightforward path because he's dealing with two things which is um a weakness in the labor market which would normally mean that you'd want to cut rates and stimulate the economy and persistent inflation which means that you would want to maintain or raise. So he's got two scenarios that are happening in the economy at the same time that call for different action by the Fed. And so they're in a quandry. That's the best way I can describe it. Yeah. Yeah. Of course. Uh confusing timing. And then of course we saw that GDP data come out this morning. I mean with the Fed's own governors publicly disagreeing and traditional correlations seem to be breaking down here. Is it even possible to kind of identify start smart money anymore? I mean, is it purely what we're seeing on the chart maybe isn't conviction. It's just pure directionless volatility as everyone, including the big institutions flying blind. Well, I think that as far as gold goes, it seems as though everyone is on the same page. There's an overwhelming about overwhelming amount of bullish market sentiment, which kind of scares me because that tends to be when a bubble pops, but we have not seen that. I mean, when you think about where gold has gone, meaning from about $3,350 in the middle of August, not that long ago, to where it is now, flirting with 3,800. Of course, this is December futures. It's not parabolic, but it's as near as parabolic as you want to see. I mean, if we compress it, here's a parabolic move right here. We were close to parabolic. And as I said, what we're doing is it's moving parabolic and then consolidating rather than correcting. And that's what is the most impressive aspect to me of what we're seeing in gold is rather than it correcting after a nice steady gain, what we're seeing is sideways action or consolidation. And that tells you that anytime gold prices get bid lower, there's there's people there that are scooping it up. So, the demand is so great. And and whether it's in the um ETFs, whether it's in the futures market or physical gold, all of those ways to be involved in gold are running on eight out of eight cylinders. They're they're at full pace right now. Yeah. I was just on kitco.com. I was looking at one of my colleagues writing a report and he was kind of talking about this analyst at bar chart pointing out that this week's gold monthly RSI, the relative strength index has hit nearly 90 and it's the most overbought level in 45 years since 1980. But on one hand, that's a sign there's also a sign of this incredible long-term momentum you talk about. On the other, it's that, you know, warning sign. You heard from those audience members. We asked them on that poll. I mean, is 4,000 still in sight here? Is it still in sight? Here's what what the the comment was. If you can see, it's just been pegged. Uh the RSI, let me you've just got it pegged rather than moving up to a certain point and then flipping meaning coming back down. So what I have always noticed about momentum indicators, stochastics, relative strength is that if the overall fundamental events that are moving a stock or commodity, in this case gold, higher are consistently remaining within the economic environment, a market can be overbought for a long period of time and continue to move up. In other words, just because it's overbought doesn't necessitate that it's going to come back down, especially if the fundamentals driving prices higher are either getting stronger or at least not diminishing, not dissipating. And that's what we're seeing right now. Yeah. Interesting. So, I'm hearing, you know, this new macro environment, traditional indicators like the RSI are almost a little bit less reliable, right? I mean, could we be in a paradigm shift where overbought can stay overbought, as you just said, for much longer than history suggests, and then being cautious here means we miss the next major leg higher. I think it's going to be based on the fundamental events that have been driving gold prices higher and whether they remain in the market. If you look at stocks, for example, like something like Nvidia that's been on a tear for years, what you'll see is it remains overbought, consistently overbought, consistently pegged at the highest level, but prices still move higher. Why? Uh because people still believe that those share prices are undervalued. And I think the same thing is happening with gold. In other words, even though you have technical indicators that are telling you it's really overbought, maybe we should be careful, the fundamentals are screaming strong reasons to move it higher. And that's what I believe we're seeing. We're certainly when we're looking at gold at near 3,800 in the futures market, above 3,700, whether it's spot or futures, we're looking at a historical moment in time. And that moment in time will continue to yield higher prices in gold as long as the fundamentals that took us to this point are still within the environment that brought gold to higher prices. In other words, as long as the problematic issues are still problematic, we're going to see gold move higher. And as far as $4,000 gold goes, I believe we'll see easily 38, maybe 39 this year. We'll definitely see 4,000 by the first or second quarter of next year. To me, when you say, "Is gold going to 4,000?" The answer is it's not if, but when. Yeah. Yeah. We've discussed that before. Obviously, a lot of people talking to me today about silver. My phone's been going off. It busted through that explosive move past $45 on the futures chart and I mean it's pulled back a little bit earlier in the day, but this midday action is what's been interesting. Despite the pullback, it's still showing significant relative strength when the macro picture is just confusing. Do you put more weight on a confirming signal like silver's leadership? Well, s silver has been a a funny animal. We're looking at a really long-term study in order to match the price that we're currently at. Um, we've got to go back in time for quite a ways and I want to make sure it's adjusted for for current pricing because yeah, the the the thing about silver is the prices that we're seeing 35 up to around 40 are the highest levels that we've ever seen historically. And of course, this is something unusual because silver was really lagging behind gold. Gold would trade to multiple all-time record new high prices, higher closes, and silver would lag behind. Now, silver is playing catch-up and that's what's amazing. Is the all-time high around 50 bucks? I mean, is it now realistic possibility this year? Absolutely. Absolutely. I mean, first we've got to take out 43 and 45. But the point with silver is that for so long it was being capped, and this is not adjusting to the to the price that I want. And I I'll try to get another, but it was getting capped at around $33. Yeah. Um on this chart, it shows it a little lower. I've I've got to adjust it for current pricing. Um, but no, this is a solid breakout like we have not seen in years. Now, is it going to be as strong as what we saw back in 2011? We'll have to wait and see. But we've never seen this kind of moves in silver except for a small period in time in uh April of 2020. Yeah. How much I mean how much fuel can really be left in the tank for silver to make that 10% run to those all-time highs without a serious correction first? You know, silver could continue to move. I believe that it has room to the upside until it starts to challenge 45 and if it's able to break above 45, then I think it might have a opportunity to get to 50. Whether it's by the end of this year or beginning of next year is the question. Again, not a matter of if, but when. Yeah. I want to bring up just before I let you go here. I mean, you know, we got to talk about the miners. Just for a quick moment, I know you're not looking at all the mining stocks like the GDX, but it's confirming this new all-time high in gold with their own price action a little bit. I'm just curious. I mean, are we seeing any kind of bearish divergence where the stocks are lagging behind? you know, kind of that classic warning signal in terms of the the GDX. And look, you're talking about mining stocks, correct? Yeah. I don't tend to follow those as closely uh as I do the actual commodity itself because there are so many particulars to individual mines and their cost of production. So, I tend to stay focused on the raw metal itself. Okay. All right. Well, let's uh let's ask you about this on the technical side. I mean, what is the one signal? Is it a price action or maybe a pattern that would kind of tell you that this thesis on the 4,000 maybe by Q1, Q2 next year is is wrong and that this confusing macro environment is now breaking that bullish trend in metals. Is there anything you'd be looking out for to see that that's confirmed? A correction? Yeah. I mean, simply put, yeah, a correction if it as long as it's trading in the way that it is. In other words, it's spiking higher and then just consolidating, spiking higher and consolidating until we get the kind of action that we typically see where gold goes up to a peak and then corrects and then corrects. That's going to change everything right now. We're in a unique time in that gold has traded past any price it's ever been. It's at all-time historical highs and we're not seeing corrections, but we're seeing consolidations. As long as that remains the overall characteristic in gold, it's got room to run to the upside. What's going to make me believe that that's possibly over is when we see more than two days in a row of a correction and we haven't seen that. Now, will we at some point? I believe we have to. Um Ben Bernani used to say and he was talking about interest rates. Trees don't go to the sky. They never have and they never will. In the same way, there's going to be absolute tops and absolute bottoms um to markets. And right now we are not at the absolute top yet. But doesn't mean that that couldn't happen at any point in time. Yeah. Yeah. Realistically, like anything in the market, right? Uncharted territory, but still bullish on gold and silver. Uh corrections being bought up here quickly, Gary. Absolutely amazing. Yeah. All right, Gary. Fantastic road map for this very complicated market. Thanks for your time today. Appreciate it. and uh hope to see you in sunny Hawaii soon. Thank you. And uh thanks for having me. Thanks, Gary. Appreciate it. All right, that was Gary Wagner of the gold forecast.com joining us with all the latest. We'll continue to watch this market momentum on the precious metals side as well as what we're seeing from the bonds, from the US economy, of course, what that means for your pocketbooks. Thank you for joining us for more of the latest market moving news and analysis. Stay right here on Kicko News. Be sure to hit subscribe. I'm Jeremy Sapp for all of us here. Thanks for watching. [Music]
Gold's ‘Overbought’ Signal is a Trap, Here's Why It's Screaming Higher | Gary Wagner
Summary
Transcript
[Music] Welcome back to Chart This. I'm Jeremy Saffron. It's been a week of extreme volatility, a tugofwar for the market driven by an increasingly chaotic economic picture. Now, early in the week, precious metals exploded higher with gold futures uh surging past $3,800 to a new all-time record and silver smashing through $45 and it's still up about 50% this year. But this bullish narrative was thrown into disarray by US economic data that should have been a kryptonite for gold. GDP growth has been revised sharply higher to a blistering 3.8% annualized pace, the fastest in nearly 2 years. Now, this news triggered a sharp rally in the dollar, knocking gold and silver back from their record highs. Now, this creates a fascinating background. The critical question on everyone's mind is which force will win. In fact, we put a similar question to our KitKo news audience in a poll last week that received nearly 6,000 votes. Uh, so thank you to everyone who chirped in there. An incredible three out of four of you. 73% said we're headed for a new all-time high above $4,000 an ounce. So, is the audience on the right track? Here to make sense of the charts is one of the best technical analysts in the business and our very own Gary Wagner, of course, editor of the goldfor.com. Gary, welcome back. Thanks for joining us this morning to break it all down. Uh, appreciate it. Thanks for having me. These are truly uh historic and exciting times, so I'm glad to be here. Yeah. Yeah, of course. And you know, it's been a minute, not too too long. We had you on almost a month ago, August 28th, and you were remarkably accurate on metals, calling the breakouts in both gold and silver, but your bearish dollar call was the challenge. And you know, it's it's kind of some incredible resilience there. That resilience was on full display this week after gold hit that record. As I mentioned, 3,800 knocked back hard down on that dollar rally. From a technical perspective, was that just a, you know, a healthy consolidation after a powerful breakout or we seeing signs of a failed breakout and potentially a bull trap? In the dollar, you mean? Yeah. Yeah. The the the dollar has been a a quandry. Um there's so many forces, dynamic forces that are working uh against each other that it's amazing. I believe that the dollar has held up as well as it has, but it has been strong and it has been resilient unquestionably. I wouldn't be surprised if it weakened a little bit. But there's underlying support that's phenomenal. Let's see if we can uh pull up a dollar chart here. If you take a look at recent activity, you can see how strong it has been really since the 17th when it was the index was at around 96. Now it's back to uh well over 98 about 98 and a half and major resistance doesn't really come in till about 100 and that's based on these tops that came in back in August. So we're seeing some real resilience because what we've done is we've broken out of the consolidation range which is the range that was the way best way to characterize it from about the middle of August through the beginning of September. You had these lows at around 97 and 40 and then highs at around 98. So, it was caught in this range and now where we're at here, we are still just below these tops right here. A break above these on a technical basis means that there really isn't any resistance back until 100 on the index. So, interesting time ahead, interesting times ahead with the dollar, unquestionably. Yeah, no kidding. And of course, we saw that dollar snap back this morning. Obviously a drag down gold and silver a little bit, but I mean gold has snapped back here. I mean, the last time I looked it was at 37.80 on the futures and and how do you see the chart? I mean, you know, silver still back too, but let's start with gold. Well, when we look at gold, what we've got to realize is that we recently, and when I say recently, at the 23rd, so on Tuesday of this week, we hit the all-time record high. Let me move this out so we can take a look at the high. The high that came in was actually 3823. That's this small wick right in here. And so the fact that it didn't close at 38 or above doesn't surprise me. What I would like to see and what I believe we could see is what we've been seeing recently. we get these big spikes to the upside near parabolic moves and then a couple of days of consolidation where it's trading sideways as you can see right here and then it will spurt up to the next level. Here's 3672 and then for 4 days it trades sideways. What we're not seeing on this entire run is any kind of real correction. And that to me is what is most impressive is the fact that it runs up and rather than correcting and selling lower, it trades sideways, meaning it's consolidating. And that is a sign of strength. When we look at the action between the 20th of August and current pricing, the longest time that gold is sold off, meaning consecutive days, has been 2 days, that was Wednesday the 17th and Thursday the 18th, and then it springs up to this candle, which is an all-time record close, an all-time record intraday high. So, exceedingly exceedingly strong. I think personally I wouldn't be surprised if it consolidates and then moves higher. I'm still bullish on gold unquestionably. You know, we've been seeing that massive price range, you know, that volatility we talked about. Has the volume confirmed this action? I mean, was the initial selloff that we kind of saw um you know, based on this this economic news, was it was just heavy panicked volume and and more importantly, is this recovery back toward the highs happening on an equally strong convincing volume? I mean, what's the volume telling you about who's winning this fight? Well, let's pull up the volume. And when we do, you can see that the the volume is pretty strong. Yeah, it's maintained a consistency of strength. If you look at the strength of this volume, the volume for summertime volume especially has been exceedingly strong and consistent. You're not you're getting some spikes like you did here. And this is of course a day in which we had what about a $60 plus dollar rise. But other than that volume has been very very steady and that is impressive especially because we're witnessing this during these summer months of trading when typically the large institutional traders take time off and vacation. We're not seeing that right now. Yeah. What's your outlook for the next month? I mean after that rejection from the highs what's the key support level that gold must now kind of hold to prove that this is not just a pause and it's not the end of the run support level it's because we are in record territory we the support levels major support is really low it's around 3500 I don't even count it then 3600 and it's only based on these a couple of days of consolidation with major support 36 662237 $3,700 to me is major support right now. Yeah, Gary, I mean, the days you and I covering this since 1750, $2,000 gold. I mean, I can sit here and remember talking about it. Here we are looking at that chart. I got to ask you, I mean, the the Fed has signaled a dovish path, which is typically rocket fuel for gold. I mean, the bond market seems to be calling their bluff. Yields are at 3-we highs and the traders are actively reducing their bets for an October rate cut. From a purely technical perspective, which signal is more powerful for the gold chart right now, the Fed's doubbish talk or the bond market's hawkish action? I I'm going to have to go with with the Fed. Yeah. Because buy on rumor or sell on facts seems to be something that still holds true now for the Fed. And the comments that Chairman Pal made on Tuesday are amazing in which he talked about a dichotomy or a difference between dealing with the problems of inflation which are still spike but at the same time dealing with a sl a sluggish labor market. and the method to deal with the labor problem is the exact opposite of what he does to deal with inflation. And he was talking about that when he um had it wasn't a conference, but he did have a opening speech and then he was interviewed in which he said that it's unusual for us to have these two issues at the same time and both of these issues call for different action by the Fed. So what they're doing is weighing which one seems to be the more prevalent problem and which way to attack it. which means that the Fed is really in a precarious place because it's not a straightforward path because he's dealing with two things which is um a weakness in the labor market which would normally mean that you'd want to cut rates and stimulate the economy and persistent inflation which means that you would want to maintain or raise. So he's got two scenarios that are happening in the economy at the same time that call for different action by the Fed. And so they're in a quandry. That's the best way I can describe it. Yeah. Yeah. Of course. Uh confusing timing. And then of course we saw that GDP data come out this morning. I mean with the Fed's own governors publicly disagreeing and traditional correlations seem to be breaking down here. Is it even possible to kind of identify start smart money anymore? I mean, is it purely what we're seeing on the chart maybe isn't conviction. It's just pure directionless volatility as everyone, including the big institutions flying blind. Well, I think that as far as gold goes, it seems as though everyone is on the same page. There's an overwhelming about overwhelming amount of bullish market sentiment, which kind of scares me because that tends to be when a bubble pops, but we have not seen that. I mean, when you think about where gold has gone, meaning from about $3,350 in the middle of August, not that long ago, to where it is now, flirting with 3,800. Of course, this is December futures. It's not parabolic, but it's as near as parabolic as you want to see. I mean, if we compress it, here's a parabolic move right here. We were close to parabolic. And as I said, what we're doing is it's moving parabolic and then consolidating rather than correcting. And that's what is the most impressive aspect to me of what we're seeing in gold is rather than it correcting after a nice steady gain, what we're seeing is sideways action or consolidation. And that tells you that anytime gold prices get bid lower, there's there's people there that are scooping it up. So, the demand is so great. And and whether it's in the um ETFs, whether it's in the futures market or physical gold, all of those ways to be involved in gold are running on eight out of eight cylinders. They're they're at full pace right now. Yeah. I was just on kitco.com. I was looking at one of my colleagues writing a report and he was kind of talking about this analyst at bar chart pointing out that this week's gold monthly RSI, the relative strength index has hit nearly 90 and it's the most overbought level in 45 years since 1980. But on one hand, that's a sign there's also a sign of this incredible long-term momentum you talk about. On the other, it's that, you know, warning sign. You heard from those audience members. We asked them on that poll. I mean, is 4,000 still in sight here? Is it still in sight? Here's what what the the comment was. If you can see, it's just been pegged. Uh the RSI, let me you've just got it pegged rather than moving up to a certain point and then flipping meaning coming back down. So what I have always noticed about momentum indicators, stochastics, relative strength is that if the overall fundamental events that are moving a stock or commodity, in this case gold, higher are consistently remaining within the economic environment, a market can be overbought for a long period of time and continue to move up. In other words, just because it's overbought doesn't necessitate that it's going to come back down, especially if the fundamentals driving prices higher are either getting stronger or at least not diminishing, not dissipating. And that's what we're seeing right now. Yeah. Interesting. So, I'm hearing, you know, this new macro environment, traditional indicators like the RSI are almost a little bit less reliable, right? I mean, could we be in a paradigm shift where overbought can stay overbought, as you just said, for much longer than history suggests, and then being cautious here means we miss the next major leg higher. I think it's going to be based on the fundamental events that have been driving gold prices higher and whether they remain in the market. If you look at stocks, for example, like something like Nvidia that's been on a tear for years, what you'll see is it remains overbought, consistently overbought, consistently pegged at the highest level, but prices still move higher. Why? Uh because people still believe that those share prices are undervalued. And I think the same thing is happening with gold. In other words, even though you have technical indicators that are telling you it's really overbought, maybe we should be careful, the fundamentals are screaming strong reasons to move it higher. And that's what I believe we're seeing. We're certainly when we're looking at gold at near 3,800 in the futures market, above 3,700, whether it's spot or futures, we're looking at a historical moment in time. And that moment in time will continue to yield higher prices in gold as long as the fundamentals that took us to this point are still within the environment that brought gold to higher prices. In other words, as long as the problematic issues are still problematic, we're going to see gold move higher. And as far as $4,000 gold goes, I believe we'll see easily 38, maybe 39 this year. We'll definitely see 4,000 by the first or second quarter of next year. To me, when you say, "Is gold going to 4,000?" The answer is it's not if, but when. Yeah. Yeah. We've discussed that before. Obviously, a lot of people talking to me today about silver. My phone's been going off. It busted through that explosive move past $45 on the futures chart and I mean it's pulled back a little bit earlier in the day, but this midday action is what's been interesting. Despite the pullback, it's still showing significant relative strength when the macro picture is just confusing. Do you put more weight on a confirming signal like silver's leadership? Well, s silver has been a a funny animal. We're looking at a really long-term study in order to match the price that we're currently at. Um, we've got to go back in time for quite a ways and I want to make sure it's adjusted for for current pricing because yeah, the the the thing about silver is the prices that we're seeing 35 up to around 40 are the highest levels that we've ever seen historically. And of course, this is something unusual because silver was really lagging behind gold. Gold would trade to multiple all-time record new high prices, higher closes, and silver would lag behind. Now, silver is playing catch-up and that's what's amazing. Is the all-time high around 50 bucks? I mean, is it now realistic possibility this year? Absolutely. Absolutely. I mean, first we've got to take out 43 and 45. But the point with silver is that for so long it was being capped, and this is not adjusting to the to the price that I want. And I I'll try to get another, but it was getting capped at around $33. Yeah. Um on this chart, it shows it a little lower. I've I've got to adjust it for current pricing. Um, but no, this is a solid breakout like we have not seen in years. Now, is it going to be as strong as what we saw back in 2011? We'll have to wait and see. But we've never seen this kind of moves in silver except for a small period in time in uh April of 2020. Yeah. How much I mean how much fuel can really be left in the tank for silver to make that 10% run to those all-time highs without a serious correction first? You know, silver could continue to move. I believe that it has room to the upside until it starts to challenge 45 and if it's able to break above 45, then I think it might have a opportunity to get to 50. Whether it's by the end of this year or beginning of next year is the question. Again, not a matter of if, but when. Yeah. I want to bring up just before I let you go here. I mean, you know, we got to talk about the miners. Just for a quick moment, I know you're not looking at all the mining stocks like the GDX, but it's confirming this new all-time high in gold with their own price action a little bit. I'm just curious. I mean, are we seeing any kind of bearish divergence where the stocks are lagging behind? you know, kind of that classic warning signal in terms of the the GDX. And look, you're talking about mining stocks, correct? Yeah. I don't tend to follow those as closely uh as I do the actual commodity itself because there are so many particulars to individual mines and their cost of production. So, I tend to stay focused on the raw metal itself. Okay. All right. Well, let's uh let's ask you about this on the technical side. I mean, what is the one signal? Is it a price action or maybe a pattern that would kind of tell you that this thesis on the 4,000 maybe by Q1, Q2 next year is is wrong and that this confusing macro environment is now breaking that bullish trend in metals. Is there anything you'd be looking out for to see that that's confirmed? A correction? Yeah. I mean, simply put, yeah, a correction if it as long as it's trading in the way that it is. In other words, it's spiking higher and then just consolidating, spiking higher and consolidating until we get the kind of action that we typically see where gold goes up to a peak and then corrects and then corrects. That's going to change everything right now. We're in a unique time in that gold has traded past any price it's ever been. It's at all-time historical highs and we're not seeing corrections, but we're seeing consolidations. As long as that remains the overall characteristic in gold, it's got room to run to the upside. What's going to make me believe that that's possibly over is when we see more than two days in a row of a correction and we haven't seen that. Now, will we at some point? I believe we have to. Um Ben Bernani used to say and he was talking about interest rates. Trees don't go to the sky. They never have and they never will. In the same way, there's going to be absolute tops and absolute bottoms um to markets. And right now we are not at the absolute top yet. But doesn't mean that that couldn't happen at any point in time. Yeah. Yeah. Realistically, like anything in the market, right? Uncharted territory, but still bullish on gold and silver. Uh corrections being bought up here quickly, Gary. Absolutely amazing. Yeah. All right, Gary. Fantastic road map for this very complicated market. Thanks for your time today. Appreciate it. and uh hope to see you in sunny Hawaii soon. Thank you. And uh thanks for having me. Thanks, Gary. Appreciate it. All right, that was Gary Wagner of the gold forecast.com joining us with all the latest. We'll continue to watch this market momentum on the precious metals side as well as what we're seeing from the bonds, from the US economy, of course, what that means for your pocketbooks. Thank you for joining us for more of the latest market moving news and analysis. Stay right here on Kicko News. Be sure to hit subscribe. I'm Jeremy Sapp for all of us here. Thanks for watching. [Music]