Gold reversed its trend in trading before the weekend, falling to $2,400 on Friday (July 20). Precious metals analyst and Sunshine Profits founder and editor-in-chief Przemyslaw Radomski said it could invalidate the recent breakout in one day or one hour.
Radomski pointed out that returning to the short-term outlook, when the gold price falls to a new high, it will send a strong sell signal that could lead to a sharp decline in gold and mining stocks.
"Of course, I could write 'if' instead of 'when', but in my opinion, this is likely to happen, and writing 'if' in this sentence could be misleading," he added.
"In addition, I previously warned that we may see some short-term chaos triggered by Trump's assassination, and as the market realizes its true impact, the gold price may fall as a result."
"And that's exactly what happened."
(Source: FXEmpire)
Gold reversed its trend again in weekend trading, and then continued to fall, with gold prices significantly lower than the highs of April and May. As invalidation does not require confirmation or verification, this is already a huge sell signal.
"Why is this so important? Because the price levels of the first breakthrough are very important, these are historical nominal highs, and you won't get a more meaningful breakthrough than this."
In fact, it happened very close to the triangle vertex reversal of gold, and gold formed a meteor reversal pattern at the exact top, which strongly indicates that this is indeed the final top.
At the same time, the following happened in silver and mining.
(Source: FXEmpire)
Silver has just lost its momentum to break through the $30 level, "as I've warned," Radomski emphasized.
(Source: FXEmpire)
GDXJ invalidated its breakthrough, with its trend and closing price below the May high.
"This in itself is a strong put signal, but the fact that we see invalidation trends in both mining and gold makes the sell signal even stronger."
(Source: FXEmpire)
"I have written that the trend of the US dollar index falling below the lows of April and June has been invalidated, but now it has also broken through the short-term downward resistance line. This breakthrough has not been confirmed, but we can still say that the short-term outlook for the US dollar index has just improved. "
Radomski concluded that this means that if someone has been watching and waiting for mining stocks to fall and profit from them, the medium-term trend is still downward. "So that's it, at least in my opinion."