by David Brady, Sprott Money:
This article will be short but very sweet. We’re finally approaching the lows in Gold and Silver, which will coincide with the peaks in the 10-Year Yield and the DXY.
The Banks are racing to cut their short positions in the precious metals. They cut their net short position in Silver by 50% last week alone.
Sentiment is falling to bearish levels consistent with prior major lows. The same goes for the RSI. As for the 10-Year yield and the DXY, they have been in lockstep since December 11. Both have also been almost perfectly inversely correlated to Gold.
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The dollar and the 10-Year are undergoing a mini dip. But I expect the next peak for the 10Y to be 4.25-4.35%.
At the same time, I expect the DXY to peak at 104.50-105.
Assuming these correlations continue for the next week or so, this will signal the bottom in Gold is somewhere in the mid-1900s.
Gold reached a low of 2005 on Wednesday. That’s a decline of $147 from its peak at 2152. I estimate that the low in Gold is now just ~$50-80 away. I expect Silver to fall below 22 also.
Simply put, the corrections in Gold and Silver are coming to a close. The peak in the 10-year and the DXY will signal the beginning of the rally to new record highs in Gold. My target for Silver is 28-30. Then the 10-Year will fall below its low of 3.78% while the DXY breaks 100 and heads down to the 90s. This will support the coming massive rally in Gold. Silver will enjoy even bigger percentage gains.
