The Next Buying Opportunity in Precious Metals: My Latest Forecast!

The die-hard gold bulls are reeling from the recent false breakout in the yellow metal and subsequent decline. But I’m not a bit surprised.

In fact, our proprietary E-Wave cycle model has been telling us for several weeks to expect another correction in gold before the next big buying opportunity.

And here we are, right on cue with the forecast.

Disappointing the gold bulls, the yellow metal closed last week at $1,274.90 per ounce, down 0.6% for the week. It even traded as low as $1,262.80 on Friday.

That’s a decline of more than 6% already since the early September peak. And this correction is likely not yet over …


First, however, I do expect gold to bounce in the near term. We should see a tradeable rally back to previous support, which is now resistance. (I’ll give you those new key levels to watch in just a moment.)

But then expect gold to roll over again and make lower lows, at least into month-end. And most likely into November.

Aside from our cycle analysis, plus my own technical insights, there is also plenty of fundamental support for a correction in gold …

Namely, sentiment. It’s still too bullish!

Time and again I’ve said: The best time to buy gold is when nobody wants it. Or, better yet, when other investors are unloading it. But just the opposite happened at the high above $1,360 … retail investors were buying paper gold with both hands.

In fact, just as gold peaked in September, more than $2 billion flowed into the largest and most liquid ETF that tracks gold, the SPDR Gold Trust (GLD). Those were the largest inflows all year!

In other words, retail investors were pilling in on the false breakout. And they got burned. But my regular readers were hopefully spared.

Here’s the roadmap to watch for gold going forward …


First, based on the trading volume and price momentum studies I rely on, in addition to the cycles, we’re likely to get a counter-trend rally soon, as I mentioned above.

Second, as the rally unfolds, look for gold to move up to initial resistance at $1,280-$1,300 an ounce, with more important resistance around $1,320. It could extend further if geopolitical tensions intensify.

Third, after that oversold bounce however, it’s likely the precious metal will roll over once again to complete a deeper correction.

How low will gold go?

It’s difficult to say, with so many cross-currents in the markets right now. But I would not be surprised to see gold retest support at $1,250 an ounce. Then the yellow metal should stabilize and build energy for the next, bigger move higher.

Bottom line: If you’re a short-term trader, with access to the Edelson Institute’s daily timing signals, you should be able to profit from the counter-trend rally in gold, and the subsequent decline, just as my members have.

But you’ll have to be very nimble. Otherwise, it’s best to keep your powder dry and wait patiently for a better buying opportunity later this year. And keep reading this e-letter for more updates on gold.

Good investing,
Mike Burnick

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Comments 13

  1. dtc34 October 9, 2017

    I think the buying opportunity was last Friday.

    Reply

  2. kesu October 9, 2017

    1. Can you comment on the Reuters article stating China has 12,000 tons of Gold vs US at 8000 tons.

    2. Can you comment on the Golden week in China which just ended Oct 9- How are Gold prices affect after the Golden week finishes.

    thank you

    Reply

  3. MD ANDERSON October 9, 2017

    Thank you for the history lesson. You forecasts for gold are wrong as they are/were for crude oil and natural gas.
    Meanwhile it’s obvious to me an inflation tsunami is about to hit us. We are about to break a 6 year overall deflationary period.
    The markets are smelling inflation. Stocks love inflation, at first..; then inflation eats into profits and then you know the rest.
    My markers tell me we are right between the 200 day and 50 day moving average for inflation. Geopolitical risks and interest talk are just an excuse as to explain moves in gold pricing. Prepare for an inflation tsunami. Yeah, baby!!!

    BTW I am not shorting the Euro as you recommend in the e-wave trader. The Euro’s up 14% on the year.
    The dollar index is going down to 80 by the end of the year. Short the Euro? LOL That’s why my cash position is in FXE and EMB. LOL

    Reply

  4. Marina Yu October 9, 2017

    I agree the short term buying opportunity was last Friday too. The gold has rebounded to $1287.

    Reply

  5. James October 10, 2017

    Is there gonna be a gold tranche? A return to the gold bullion standard? Maybe even a gold rush or a gold avalanche? How’s this gonna effect the golden steady state level of income. Are there gonna be increasing returns to labour and capital in the cobbe Douglas production function? Are we gonna see incremental changes to the current budget surplus or deficit? What about GDP at factor costs, and GDP at market prices, are we gonna see a more humane society. What about economies of scale and diseconomies of scale? Are we gonna see the advantages of large scale production outweigh the disadvantages of large scale production. Could we be in for another boom in this jugular, 7 to 11 year cycle, in which we are moving from prosperity, recession, depression, and improvements and back again economic cycle. Could we be in a kondratieff wave, kutzets cycyle, or kitchin cycle, anything goes in this boom, recession, depression, recovery and growth cycle that we are in. Enjoy the boom, causes booms don’t last forever.

    Reply

    • MD ANDERSON October 10, 2017

      Holy 20 questions, Batman.

      OCT’29 gold was $20.67oz for reference.
      NOV’15 1.96 oz of gold to buy the S&P500, today 1.97oz
      SEP’29 16.58oz of gold to buy the DOW, today 17.65oz
      S&P500 up 13.93% YTD / GLD up 11.67% YTD

      DO you get my point?

      Just buy gold; store it in New Zealand or Singapore.
      “Gold is money and nothing else;” just ask China, Russia, and India.

      Reply

  6. Hank October 10, 2017

    The forecast (which may be correct) sounds familiar, i.e. gold may rally in the short term but will then continue to sink. So don’t “back up the truck” just yet. Of course it is a safe thing to say, because you don’t want to be blamed for advising people to buy gold now and then have it go down. But when, if ever, will you tell us to buy?

    Reply

  7. Richard Davis October 10, 2017

    Mike, I followed your cycle analysis and sold all gold- and silver-related positions on 09/05/17. Glad I did.
    Thank you.
    R. Davis

    Reply

    • MD ANDERSON October 10, 2017

      I source Burnick’s info and I also get data from another source, second opinion so to speak.
      Information and data from a neutral party.

      I’ve made money with Burnick’s picks. Good picks on DIG and BOIL and I forgot DUST and HCLP (never heard of em).
      On the other hand I question a lot of Burnick’s data/forecasts.
      I will state I DO NOT follow Burnick’s entry price or stop loss/limits.

      I rotate between GDX; GDXJ, SIL, SILJ first I lock in the profits. Today (10/10) some selling; hit my stops on GDXJ, and SIL. Almost hit my stop on WPM; I’m up 5.02% since I bought 9/27.
      so I bought MT, FCX, more KLDX, TGB, and WDO on the cheap(er).
      up and down up and down.

      Put in some work and the money is there to be had.
      You’d better get back in.

      I also short KSS on a daily basis; I’m addicted; huge short credit yesterday. Today a little more. Maybe it’s time to pick on TGT.

      We’re almost to the point where it won’t matter; commodities will go up in perpetuity.

      Reply

  8. Marina H. October 10, 2017

    There is a probability that Yellen won’t raise the interest rates in Dec. ’17 meeting of the Fed. Her term expires early in 2018 and she may not want to pass the “torch” of higher rates to her successor.

    Reply

  9. Dick. Braatz October 10, 2017

    As I watch TV and read materials such as this, I’m reminded of what I have seen and experienced. When they start selling it to ma, pa and the little guy on the street (TV gold and silver), the price increases are over and the elites are looking to distribute their position (land too) at a profit. Also, the “Informed consensus is never right”. D. B.

    Reply

  10. J. Walker October 11, 2017

    Looks like the Gold Supercycle is starting to show signs of birth!
    Invested in gold on a monthly basis all the way from $300 to >$1400 and got out when volatility was too much for me. Been standing aside ever since.

    Reply

  11. Zoltar October 18, 2017

    How can we know when Gold has reached it’s absolute bottom?

    Reply