I started out this year saying that, to date, gold has been sold on strength and bought on weakness. And the day strength is bought is the day we see a much bigger rally.
A Few Gold Headlines
- Gold prices hit record high in Japan
- China steps up gold imports in 2022: Swiss gold imports at four-year highs, Russia gold imports rise
- Swiss pension fund increases exposure to gold
Every time we look at the price of gold, we take one step closer to realizing our prediction of the $3000-$3500 price target by 2024 and not ruling out a trip to $5000 by 2025.
Yes, gold is overbought at current levels. Yet, haven't you heard the expression, "Overbought can become more overbought?" Of course, you have. However, not for some time. Probably not since the huge bull run of 2021, and of course, as it related to equities.
Dear readers, we were primarily commodity floor traders for two decades. We are presently bullish on metals. We have been hammering this home since post-COVID.
Now, though, we see a new phase, a parabolic one.
Back in the day on the COMEX Exchange in the World Trade Center, pre-social media, pre 24-hour news loops, and pre-"everyone is a trading genius at least once in their lives", in the late 1970s, floor traders bought dips in gold and silver. Local traders did not concern themselves with calling corrections or tops. We were there to trade price and momentum.
Now, after a very long wait, those days in the metals have returned.
With proper risk management, dip buying on corrections appears to make a lot of sense. Other than a very rich relative strength indicator, we see little in the way of a top at this point. The landscape mimics (on steroids) the 1970s. We believe, with current macroeconomic and geopolitical conditions such as they are, 2023 is even more bullish for the metals than it was five decades ago.
Silver is not far behind.
Retail investors have yet to load up on precious metals. Most are trained to buy equities and know little about commodities.
Right now, retail investors sway bullish on stocks. Once metals gain more of the retail traders' attention can I get a P-A-R-A-B-O-L-I-C?
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Mish in the Media
Catch Mish January 26th on Fox Business' Making Money with Charles Payne and on TheStreet.com!
In this appearance on CMC Markets, Mish digs into her favourite commodity trades for the week and gives her technical take on where the trading opportunities for Gold, oil, copper, silver and sugar are.
Mish gives her thoughts on the big NYSE glitch on Tuesday, January 24 on this appearance for BNN Bloomberg!
Mish discusses the continued bull case for commodities and why the SPY will remain in a trading range in this appearance on Business First AM.
In Singapore, Mish discusses China and whether the markets are bottoming or going lower from here on CNBC Asia.
- S&P 500 (SPY): SPY has crossed the 200-DMA and is now slightly above it, but is still a very narrow price range below to 50-DMA. Held pivotal support and now what was resistance is support at the 200-DMA and resistance is 405 overhead still.
- Russell 2000 (IWM): Filled the gap and continued to hold the 200-DMA and overhead resistance at 189.
- Dow (DIA): Back over the 50-DMA by a hair. Holding support at the 50-DMA at 336.07 and 339 is resistance.
- Nasdaq (QQQ): Crossed the 50-DMA on Friday to close above. First level of resistance is at the 200-DMA and closing in the middle of the two DMAs.
- Regional banks (KRE): Close to crossing 60.72 (50-DMA). First level of support is 58 and resistance is 50-DMA.
- Semiconductors (SMH): Still holding key support easily at the 50-WMA and 200-WMA. 233 support and 239 resistance.
- Transportation (IYT): Still holding 225 key support here and now holding first level of support; holding 227, closing 227.94 with resistance at 230.
- Biotechnology (IBB): Still the best sector, with 132 key support still holding and holding first level of support at 134, with 137 resistance still (closed 136.79).
- Retail (XRT): Holding pivotal support at 63. First level of support at 66, resistance 70.
Director of Trading Research and Education