Intermarket structural analysis research
On October 12, 2024 it was noted that a move up in gold will have to wait. This is based on the completion of a 2016 to 2024 three peak Non Commercial futures trading sequence. In addition to this the 2008 chart structure is similar to the current 2024 chart Fibonacci sequence. At this point a decline is expected in 2025.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
On September 17, 2024 it was noted that after four years of economic stimulus packages gold was expected to move higher. A detailed review of Non-Commercial Gold Futures Trader positions revealed that, at this point, a move up will have to wait. Gold is currently in the process of completing a 2016 to 2024 three peak Non Commercial futures trading sequence (Points 4, 5 and 6) shown below. This sequence is similar to what occurred between 2009 and 2011. After 2011 a decline continued until 2020 when economic stimulus packages were once again issued to bail out the economy.
Note that this information is for educational purposes only and not a recommendation.
Gold charts courtesy of StockCharts.com.
On September 24, 2024, the Office of the Comptroller of the Currency released its Quarterly Report on Bank Trading Activity and Derivatives Activities. Figure 18 on PDF page 42 shows precious metals derivative contracts held by Insured U.S. Commercial Banks and Savings Associations. The banks continue to move into precious metals contracts.
Note that beginning January 1, 2022 the largest banks were required to calculate their derivative exposure amount for regulatory capital purposes using the Standardized Approach for Counterparty Credit Risk (SA-CCR). Gold derivatives were considered precious metals derivative contracts rather than an exchange rate derivative contract, resulting in an increase in reported precious metals derivative contracts compared.
Note that this information is for educational purposes only and not a recommendation.
On July 10, 2024 it was noted that the current gold pattern was similar to that of the late 1970s. After four years of economic stimulus packages gold will move higher. The reason for this rise was explained in the Silver Ascending Triangle article posted on December 24, 2022. This move upward is expected to go parabolic, as it did in 1979.
Note that this information is for educational purposes only and not a recommendation.
Charts courtesy of StockCharts.com.
2020 – 2024
1975 – 1979
Gold is currently in a position that is similar to where it was in the second quarter of 2022. A pullback is expected in 2024 prior to moving higher. This pattern is also similar to that of the late 1970s.
Charts courtesy of StockCharts.com.
On June 2, 2024, it was noted that structural calculations revealed gold was in a position similar to where it was on March 11, 2020. In addition to this, a review of separate volume related interface calculations indicate a move upward is still expected. Signal dates from this review include March 31, 2020, September 16, 2021, April 22, 2024, and June 7, 2024.
Charts courtesy of StockCharts.com.
On May 26, 2024 it was noted that gold’s relative value against the U.S. Dollar was in a position similar to where it was on May 4, 2010. In addition to this, daily Engrbytrade™ structural calculations show gold is in a position similar to where it was on March 11, 2020. A pullback is possible, but the trend upward is expected to remain intact in 2024.
Charts courtesy of StockCharts.com.
Daily Engrbytrade™ calculations indicate gold’s relative value to the U.S. Dollar is currently in a position similar to where it was on May 4, 2010. This is due, in part, to numerous U.S. Congressional spending bills passed between March 2020 and March 2024. As a result of this spending, a move similar to what occurred between 2010 and 2011 is expected.
On December 22, 2023 it was noted that daily Engrbytrade™ Gold/U.S Dollar derivative calculations have moved quickly in a direction that confirms gold is nearing the completion of a long term ascending triangle structure. This is similar to what developed during 2008 and 2009. Gold’s recent move confirms a 2024 angle rise of 44.43 degrees. This is similar to the angle rise in 2009. Gold is still expected to conduct a move that is similar to what occurred between 2010 and 2011.
Charts courtesy of StockCharts.com.
On March 27, 2024, the Office of the Comptroller of the Currency released its Quarterly Report on Bank Trading Activity and Derivatives Activities. Table 21 on PDF page 25 shows precious metals derivative contracts held by four major banks. This includes Goldman Sachs, JP Morgan, Citibank and Bank of America. Figure 18 on PDF page 42 shows Notional Amounts of Precious Metal Contracts by Maturity for the 4th quarter of 2023. This move into precious metals by the banks continues to be consistent with data and chart structures discussed in the following Engrbytrade™ posts.
Gold: Long Term Ascending Triangle
It should be noted that prior to January 1, 2022, gold derivatives were categorized with exchange rate derivative contracts rather than precious metals derivative contracts. This changed reported precious metals derivative contract values in 2022 and future years.
On December 22, 2023 it was noted that daily Engrbytrade™ Gold/U.S Dollar derivative calculations moved quickly in a direction confirming gold was nearing the completion of a long term ascending triangle structure that is similar to what was developed during 2008 and 2009. On February 18, 2024 it was noted that Engrbytrade™ Silver/U.S Dollar derivative calculations were moving in a direction confirming silver is nearing the completion of a long term ascending triangle structure.
What is needed at this point is a silver confirmation move above its ascending triangle before both metals are expected to continue moving significantly higher.
Stock charts courtesy of StockCharts.com.
On December 13, 2023, the Office of the Comptroller of the Currency released its Quarterly Report on Bank Trading Activity and Derivatives Activities. The chart on page 42 of this report provides Notional Amounts of Precious Metal Contracts by Maturity related to insured U.S. Commercial Banks and Savings Institutions. Starting in 2022 banks dramatically increased their exposure to precious metals. A recent article written by Willem Middelkoop from the Official Monetary and Financial Institutions Forum provides some perspective on central banks and the revival of gold.
This move into precious metals by the banks aligns with data and chart structures discussed in the following Engrbytrade™ posts.
Gold: Long Term Ascending Triangle
BRICS countries are duplicating Bretton Woods organizations similar to the World Bank and IMF. For over 15 years BRICS countries have been building the infrastructure needed to support a new global financial system tied to gold. There are another 18 nations waiting to join.
Dubai Precious Metals (DPMC) 2023 conference
November 21 – 22, 2023
Jim Rickards Keynote Address
On June 25, 2023 it was noted that research would continue with other currencies to see if trader positioning is conducted prior to specific rally or decline events. On October 22, 2023 it was noted that the triple top formation by itself did not necessarily mean a decline was expected, but Engrbytrade™ futures trading data calculations were trending in a direction showing traders hedging their trades for a long term decline.
Since October 22, 2023, daily Engrbytrade™ Gold/U.S Dollar derivative calculations have moved quickly in a direction that confirms gold is nearing the completion of a long term ascending triangle structure that is similar to what was developed during 2008 and 2009, just prior to moving higher in 2010 and 2011. Based on current daily calculations there is a high probability gold will stay within its ascending triangle prior to moving to the upside.
Stock charts courtesy of StockCharts.com.
Daily engrbytrade™ Gold to U.S. Dollar calculations on December 6, 2023 gave an indirect signal that aligned with a stock market peak that is similar to what occurred on January 28, 2020 and November 23, 2021. The declines noted below show what occurred after receiving the indirect Gold to U.S. Dollar signals on January 28, 2020 and November 23, 2021.
This observation also aligns with S&P500 traders positioning for a decline, as noted on November 20, 2023.
Dow:
January 28, 2020 – March 23, 2020 decline = -35.27%
November 23, 2021 – October 13, 2022 decline = -16.125%
NDX
January 28, 2020 – March 23, 2020 decline = -22.92%
November 23, 2021 – October 13, 2022 decline = -32.33%
S&P500
January 28, 2020 – March 23, 2020 decline = -31.71%
November 23, 2021 – October 13, 2022 decline = -21.76%
Stock chart courtesy of StockCharts.com.
The current 2020-2023 gold chart structure shown below is what would typically be called a triple top formation. This by itself does not necessarily confirm that a decline is expected. The underlying futures trading data behind this structure is important. In September 2021 and October 2023 Engrbytrade™ futures trading data calculations show that traders have been positioning their trades with the expectation of a long term decline. Similar moves occurred in 2012, and 1994-1995 as identified by arrows in the charts below.
Stock charts courtesy of StockCharts.com.
Engrbytrade™ intermarket futures trading data calculations indicate gold is expected to start moving lower.
A detailed review was conducted using British Pound futures trading data calculations between 2012 and 2023 in comparison to specific time frames when gold changed direction. The result of this review revealed futures trader’s positioned for a decline when gold moved into a specific value range against the British Pound. Three out of four decline signals occurred during gold’s completion of a triple top, as shown in the charts below. This same signal is not evident with the relative value of gold to the U.S. Dollar. There were no events identified where futures trader’s positioned for a rally. Research will continue with other currencies to see if trader positioning is conducted prior to specific rally or decline events.
Stock charts courtesy of StockCharts.com.
Intermarket futures trading data calculations indicate the U.S. Dollar, Euro and gold are in a structural position similar to where they were in October 2012. This configuration is expected to produce a drop in gold over several months as the U.S. Dollar and Euro move higher. The following charts illustrate this positioning.
Stock charts courtesy of StockCharts.com.
Daily Engrbytrade™ calculations indicate a decline to $1820 is expected over the next 30 days. This will be similar to the decline from April 18, 2022 to May 16, 2022.
Stock chart courtesy of StockCharts.com.
A description of what would occur over the long term with gold and silver was provided on January 15, 2023. The following charts were developed to provide nominal values with some perspective on that discussion. There are times, such as October-November 2008 and September 2022, when metal values diverge away from the U.S. Dollar’s relative value resulting in an undervalued situation for metals. As noted on January 15, 2023, the next peak in gold and silver is expected to occur between November 2024 and May 2025. During that time, an overvalued situation for the metals should occur.
Intensifying War, Enormous Upside for Gold – Charles Nenner
Inflation: The Biggest Scam In The History Of Mankind – Hidden Secrets of Money Ep 4
Three economic rescue packages were signed between 1970 and 1971. What followed was a run up in silver prices until the first quarter of 1974. Three economic rescue packages were signed between 2020 and 2022. Based on history, the result will be another run up in gold and silver prices.
Cause:
Economy/Gold/Silver: Impact of Congressional Spending
Effect:
Silver prices could touch a 9-year high in 2023 — with a bigger upside than gold
Gold price backs off on rising dollar, but set for fifth weekly rise
The $2 trillion Cares Act was signed on March 27, 2020. The $1.9 trillion American Rescue Plan was signed on March 11, 2021. The Inflation Reduction Act of 2022 was signed on August 16, 2022. Signing three economic rescue bills within three years to provide $4.7 trillion in funding is extreme.
The last time two economic rescue bills were passed was when the $152 billion Economic Stimulus Act of 2008 was signed on February 13, 2008, followed by the $831 billion American Recovery and Reinvestment Act of 2009 that went into effect on February 17, 2009. On February 17, 2009 gold futures closed at $967.50 and moved up to a high in the futures market of $1923.70 on August 5, 2011. Silver futures closed at $14.03 on February 17, 2009 and moved up to a high in the futures market of $49.56 on April 28, 2011.
A similar series of events took place between 1975 and 1977. In 1975 the $23 billion Tax Reduction Act was signed on March 29, 1975. This was followed by the Economic Stimulus Appropriations Act of 1977 that was signed on May 13, 1977. Following the approval of these two bills, gold futures hit a closing high of $909.9 on January 22, 1980 and silver futures closed at $41.50 on January 21, 1980.
The source of funding many of these bills goes back to August 15, 1971 when Nixon closed the gold window and stopped the international convertibility of U.S. Dollars to gold. On August 15, 1970 the Economic Stabilization Act of 1970 was passed to stabilize prices, rents, wages, salaries, interest rates, dividends, etc. as part of a price control program. On July 12, 1971 Nixon signed the $2.25 billion Emergency Employment Act of 1971. After closing the gold window on August 15, 1971, Nixon expanded the size of the next stimulus bill by signing the $15 billion Revenue Act of 1971 on December 10, 1971. Gold futures then went from $44 on December 10, 1971 to $179.80 on April 3, 1974. Silver futures went from $1.43 on December 10, 1971 to $6.29 on February 26, 1974.
The impact of approving very large rescue plans through consecutive stimulus bills has historically been followed by significantly higher gold and silver prices within 9 to 11 calendar quarters of the last bill being approved. In this case it would be the $739 billion Inflation Reduction Act signed on August 16, 2022. Based on this timeline the next peak in gold and silver is expected to occur between November 2024 and May 2025.
Daily engrbytrade™ calculations indicate the US Dollar is expected to continue moving lower. Similar daily calculation results noting a decline occurred on November 15, 2022. Weekly futures trading data calculations also indicate the Dollar will continue to move lower in 2023. In addition to this the effect of a declining Dollar will cause gold and silver to continue moving higher. Current intermarket futures trading data structural calculation results for gold and silver are similar to that of January 27, 2009.
Stock chart courtesy of StockCharts.com.
On October 9, 2022, it was noted that the US Dollar had an upper trend line angle of 26.26 degrees above the x-axis and was similar to what was developed between 1991 and 2001. The chart below shows the US Dollar hit a high of 114.75 on September 28, 2022 with an upper trend line angle of 24.19°. This indicates a predetermined course was developed after 2008 using an upper trend line angle of 25.225° (+/-1.035°). Current intermarket futures trading data calculations show the US Dollar is expected to move higher, repeating a move upward similar to what occurred during the first half of 2001. As the US Dollar moves toward the upper trend line, a decline in value is expected for the Australian Dollar, British Pound, Copper, Euro, Natural Gas, Heating Oil, and Platinum.
During the Dollar’s initial rise in 2001, the Dow moved up into mid-February 2001 and then had a sharp decline going into the end of March 2001. Preliminary data indicates the Dow is expected to conduct a move similar to this during the first quarter of 2023.
Long term intermarket futures trading data calculations also indicate gold and silver are expected to develop a predetermined inverse chart structure of the US Dollar that is similar to the time frame between January 2001 and March 2008, as shown in the charts below.
Stock chart courtesy of StockCharts.com.
