/DX (US Dollar futures) has broken below the small bearish rising wedge which increases the odds of a backtest of the recent breakout although pullback or not, I still favor a rally up to at least the 95.675 price target in the coming days/weeks. Should /DX move lower & backtest the recent breakout above the 93.862-93.636 former resistance, now support zone, that should be near-term bullish for gold & silver while a continued rally towards the 95.675 target should be bearish for gold & silver. I don’t have a strong opinion on which of those two scenarios plays out although I’m leaning towards the latter. Either way, I still favor a rally up towards that 95.675 target on /DX as its simply a matter of how soon we get there. Of course, that doesn’t assure that we will, just trying to point out that the small bearish rising wedge that just broke down increased the odds of a counter-trend pullback. 60-minute chart below.
DX 60m Sept 25th
Zooming out to the long-term weekly chart of the gold ETF, GLD is trading near the top of my pullback target zone & could reverse soon although I can’t make a decent case to cover shorts or step in long at this time.
GLD weekly Sept 25th
The next chart below is a 120-minute (2-hour candlesticks) chart of /GC (gold futures) showing both the near-term bearish scenario if /DX continues up towards the 95.675 target as well as the near-term bullish/intermediate-term bearish scenario if /DX backtests the recent breakout before continuing up to the 95.675 target.
GC 120m Sept 25th
Looking at the 1-year daily chart of /GC, the bounce scenario (largely depending on $USD) has gold potentially backtesting the 1911ish resistance level before heading to 1816ish while a continued rally in $USD will likely send /GC there sooner.
GC daily Sept 25th
My maximum downside target for /SI silver on this daily chart is the 19.128ish support level. As with gold, a decent pullback in the $US Dollar over the next week or so would likely spark a snapback rally in silver before the next leg down.
SI daily Sept 25th
Bottom line: The very near-term outlook for gold, silver, & the US Dollar isn’t very clear & one might opt to wait until next week to see if the $USD is going to shrug off the recent breakdown below the small bearish rising wedge or succumb to it with a decent pullback. Longer-term traders & investors might opt to wait until there is some decent evidence that the correction has fully or mostly run its course before scaling back into gold positions closed out a couple of months ago when the case for a substantial correction was first made.
On a non-related, admin note: After a previous false negative, my 2nd COVID-19 test in less than a week came back positive today. My symptoms have been relatively mild during the day but have kept me off the computer in the evening as that’s when ‘Rona comes out & does her thing (followed by mostly sleepless & unpleasant nights). I suspect I will turn the corner very soon as mild cases typically last 2-weeks & I am coming up on week 3. Once I’m back to 100%, the frequency of updates, analysis, & trade ideas should pick up. I will also catch up on emails from the RSOTC Support Center asap.