Jason Perz and Sam Gatlin reveal the setups driving metals and macro markets.
Precious Metals Brace for a Breakdown
By Ian Culley
August 14, 2023
From the Desk of Ian Culley @IanCulley
One of my favorite scenes from “Forgetting Sarah Marshall” is when we get to meet the in-house surf instructor, played by Paul Rudd.
Rudd’s character, Chuck, a transplant local, imparts sage advice, “When life gives you lemons, just say f@&k the lemons and bail!”
I always laugh at that one, even as I write this note.
That’s probably because I’ve spent the better part of the past twenty years chasing waves – but I don’t share this Hollywood version of a stoner-surfer ethos regarding life.
But I do follow this mindset when it comes to markets…
Rising real yields and a pesky US dollar are making lemons of the precious metals space.
A weakening dollar and falling interest rates lined up to vault gold toward new all-time highs.
Instead of kick-starting a precious metals rally, both potential catalysts are heading in the opposite direction (higher) – and the focus with it.
I’m not monitoring these shiny rocks for breakouts. I’m tracking fresh breakdowns.
The June pivot lows mark a critical level of interest as the precious metal space braces for a downside rout.
The 1,900 level coincides with my line in the sand for gold futures.
A break below those former lows increases downside risks.
If gold futures slip below the June pivot lows – bail!
No one has to feel bad about ditching gold. Better opportunities lie just around the corner.
The corresponding level for silver futures stands at 22.14.
A break below that level in silver would also involve a trendline violation, signaling a potential near-term trend reversal.
If silver slides below that key level – bail!
Remember, it’s only a trade. Holding a position in silver does not define who we are.
It’s no different for the Gold Miners ETF $GDX.
I liked buying the dip in GDX – the risk was well-defined with an outsized reward.
The trade initially worked before it found resistance at a logical level of overhead supply at approximately 33.25.
If GDX undercuts our initial risk level – bail!
Don’t get me wrong: I remain bullish from a structural perspective.
But two crucial components must line up for a successful trade or investment: timing and direction.
If gold, silver, and the miners lose their pivot lows for late June, the timing is off.
Gold Rush Report highlights the breakout setups, rotations, and technical signals shaping metals markets — giving traders an edge in gold, silver, and commodities.
