Today top Citi analyst Tom Fitzpatrick sent King World News a major update on the action in the gold & silver markets.
But first, Fitzpatrick’s perfect March 9th bullish call on commodities…
Top Citi analyst Tom Fitzpatrick sent KWN this note on March 9th, when he turned bullish on commodities: The Continuous Commodity Index (CCI) rallied through the top of the channel and has a reverse head and shoulders pattern that targets 395. Overall the chart below is pointing towards a positive market outlook (for commodities) (see chart below).
Fast forward to today’s call from top Citi Analyst Tom Fitzpatrick…
Tom Fitzpatrick: The important pivot to watch here (on silver) is $19.23. A close below there would be a bearish break and could see a move down to support levels in the $18 area (see chart below).
And the bearish trend/outlook for the Gold/Silver ratio remains intact whereby a move down here reflects Gold underperformance (see Gold/Silver ratio chart below).
Gold is failing to push through the 55-month moving average pivot. This is major resistance on a long-term monthly close basis (see chart below).
The short term chart below highlights the bearish setup and the risk of moving back down to the 55 day moving average. Another close below the double top neckline at $1,335 would again suggest a move down to the double top target at $1,295 (see chart below).
It is worth noting that the past three corrections in Gold have made it to (and in one case through) the 55-day moving average, which would be the next target at $1,282 (see blue line on the chart above).
Trend line support is at $1,246, followed by horizontal levels closer to $1,200.
King World News note: Fitzpatrick is bullish on silver and gold, but what he is saying is that silver and gold may briefly move lower to test the breakout, before continuing their advances. It’s important to understand that as the Gold/Silver ratio continues to trend in favor of silver, this is yet another indication that the bull markets in gold and silver are well underway. For KWN readers around the world who are looking to accumulate physical gold or silver, remember to use the pullbacks to accumulate precious metals, rather than chasing price. Having said that, it is also important to remember that in bull markets almost all of the surprises take place on the upside — think Brexit and how it propelled gold and silver prices higher.
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