Gold, Silver And Mining Year-End Price Targets

Gold and silver rallied strongly late Tuesday as it became apparent Trump would win. However, it was short-lived, and prices quickly retreated. The abrupt reversal was a precursor to the sharp declines that followed later in the week.

Miners broke decisively through the neckline support level illustrated in the updates. This has opened the door for an additional 25% decline. Initially, I thought the intermediate drop would stair-step gradually lower into the first quarter of 2017. However, investors have entered panic mode, and we might see a price bottom before year-end.

With prices still dropping frantically into Friday's close, we could see a continuation decline early next week. Pay close attention to the neckline resistance levels in the mining charts highlighted below. Prices need to swiftly get back above these levels to prevent an even deeper selloff.

US Dollar Monthly Chart

The US Dollar has a 16-year major cycle. After a year-long consolidation, prices should rally to their final peak in the first part of 2016. From there, we expect a bear market decline and new lows in the years ahead. That low should correspond with a peak in the gold bull market.

Japanese Yen

The Yen is nearing its yearly cycle low. Prices should bottom between 89.80 and 91.75 before year-end. This bottom may correspond with the low in gold we are looking for.

Gold Weekly Big Picture

In early 2016 gold broke out of the lower price channel and reentered the upper zone. The medium-term bullish case for gold: Gold prices find support at the central trendline and launch into a rally that breaks above the upper trendline. The catalyst for this scenario could be the FED not raising rates in December.

Gold Weekly Key Level

I will be looking for a price reversal in the highlighted area before year-end.

Silver Weekly

After breaking the 4-week trendline, prices crashed from $19.00 to $17.11. A similarly measured target projects to the $15.83 support. I will be looking there for signs of a reversal in the coming weeks.

NOTE: THE PRICE OBJECTIVES TO FOLLOW ARE ONLY VALID IF THE HUI REMAINS BELOW THE 195 LEVEL FOR 10-TRADING DAYS.

The measured prices objectives to follow are just guidelines and not exact targets.

HUI

Prices broke sharply through the neckline support of the head-and-shoulder pattern. A close back above the 195 level is needed to neutralize the bearish potential. You can estimate the patterns objective by applying the distance from the neckline and the head to the underside of the neckline. In this case the target is 133.

GDX

The Head&Shoulders pattern in GDX targets $15.77. Note the significant positive divergence forming in the MACD (bottom).

NUGT

GDX dropping to the $15.77 target area equates to roughly $2.00 in NUGT.

GDXJ

The junior mining ETF doesn't adhere to a traditional head-and-shoulder topping pattern (the right shoulder is above the left). However, a measured target can still be applied, calculating an objective of approximately $25.66.

JNUG

GDXJ dropping to the $25.66 target area equates to roughly $1.75 in JNUG.

DUST

If GDX reaches its target area, DUST has a price objective between $80 and $100.

SPY

I've been trying to make sense of the violent reversal in stocks after the Tuesday election. I believe the plunge-protection-team stepped in to buy futures once they were down 100+ points, subsequently, producing a massive short covering rally. I'm watching for signs of a reversal in the provided target box.

WTIC

Oil bounced to roughly $46. Consequently, it looks like another move lower is upon us. We could see prices reach the low 30's to high 20's by the end of January 2017.

Buying On Weakness

Significant buying on weakness numbers followed miners on Friday. I will be watching for more numbers next week. The selling on strength numbers helped forecast this move lower. Data provided by WSJ.

Nearly every price gauge has entered excellent buy zone territory. However, we will not issue a buy signal until there is sufficient evidence of a bottom. When it's time, we will cover potential trade setups for the next move higher.

Next week could be just as exciting…expect multiple updates.

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