Overview
The article discusses the current state of the gold market, particularly focusing on its behavior around the 61.8% Fibonacci retracement level. The author notes that gold is re-testing this critical level for the third time since the 2011 peak, suggesting a potential bullish trend, but also raises questions about the sustainability of this movement.
Historical Context
Radomski draws parallels between the current market conditions and those observed after the 2011 gold peak. He highlights that after the 2011 top, gold experienced three corrections to the 61.8% retracement level, and the current situation mirrors this pattern. The author emphasizes that while gold has moved higher, it does not invalidate the previous bearish analogy; rather, it indicates that the market may be in a different phase of the same cycle.
Silver's Performance
In the analysis, silver is also discussed. Although silver has shown strength with a recent rally, the author points out that its price highs are progressively lower compared to previous peaks, indicating relative weakness against gold. This pattern is reminiscent of the behavior seen after the 2011 top, suggesting that silver may not sustain its gains if gold falters.
Market Predictions
Radomski expresses concern that if stock markets decline and the USD Index rises, precious metals, including gold and silver, may experience significant declines in the coming weeks. He suggests that the current bullish sentiment may not last, and traders should be cautious.
Bitcoin Analysis
The article also touches on Bitcoin, noting that a short position in Bitcoin is currently slightly profitable. The author describes the recent price action as a "dead cat bounce," indicating a weak recovery that does not support a bullish outlook for Bitcoin, which he refers to as the "new gold."
Conclusion
In conclusion, Radomski encourages readers to stay informed about market developments and to consider the implications of Fibonacci retracement levels in their trading strategies. He invites readers to subscribe to his newsletter for ongoing analysis and insights.