The silver’s triangle-vertex-based reversal worked exactly as I had expected.
Without knowing how those reversal points worked, it would have been tempting to go long silver based on its short-term breakout (above the declining resistance line).
Yesterday, I was interviewed by Andrew Maguire (it will be aired next Friday), and we discussed that silver is a market that’s dangerous to trade. And it is indeed – precisely because it has several characteristics that defy the regular technical rules. It’s like if the white metal had its own version of technical analysis. Fake breakouts and short-term outperformance of gold often leading to declines are the things that many constantly get wrong about this market. The triangle-vertex-based reversal works on multiple markets, but in silver’s case, it just worked in alignment with silver’s tendency to reverse shortly after breakouts.
The other market where we see the triangle-vertex-based reversal right now is crude oil.
The black gold moved higher recently (no wonder, there’s no real peace between Iran and the US), but it looks like a corrective downswing is due.
Recently, oil and precious metals moved in opposite directions, so it seems that we might see one (final?) move up before the slide really picks up.
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The USD Index has been preparing us for what’s next, anyway. The current consolidation pattern has been forming for so long that it has turned into…
A handle of a bullish cup-and-handle pattern.
This pattern is likely to launch the USD Index above 100, and this – once confirmed – is likely to launch a truly powerful rally to new yearly highs. In fact, I expect the USD to move not just above the 2026 high, but also above its 2025 high.
Meanwhile, the general stock market didn’t move to its Fibonacci-extension-based target just yet. It was close but it declined a bit instead.
Yesterday’s strong initial jobs data increased expectations of a rate hike, which explains why both: precious metals and stocks declined. This tells us that tomorrow's main jobs report is the gate for the next move, so I’d like to comment on it a bit more.
The May nonfarm payrolls number is due Friday, and expectations are modest, around 85,000 jobs. That low bar matters, because the rest of the week's labor data ran hot. Tuesday's JOLTS showed job openings at roughly 7.6 million, the highest in nearly two years. Wednesday's ADP private payrolls came in strong as well. Both reinforced the picture of a resilient labor market, the dollar firmed on each, and gold fell below $4,500 on Wednesday as a result. With the bar set at 85,000 and the week's other readings running above expectations, a beat is the higher-probability surprise.
Here is why that matters for the metals. A strong labor market keeps the Fed boxed. It removes the case for cuts and, with inflation already running near 3.8% on the back of the war's energy costs, it feeds the case for a hike. The market has noticed. December rate-hike odds have climbed to around 42%, and yields have pushed higher across the curve. A hot payrolls number tomorrow hardens that higher-for-longer story and presses gold and silver lower.
A jobs report is a binary event, so I will be straight about the other side. A soft number is the one near-term risk to the bearish case. It would ease the rate-hike pressure, soften the dollar, and hand gold a reason to bounce. If that happens, I will weigh it honestly rather than wave it away. But given how hot JOLTS and ADP both ran this week, the weight of the evidence points to a firm number, which is the gold-negative outcome.
So, technically, one last move higher seems quite possible. Fundamentally, it’s also possible, but not necessarily likely.
Either way, the next big move in the precious metals market – and non-energy commodities – is very likely to be to the downside.
Thank you for reading today’s free analysis. More details follow for Gold Trading Alert / Diamond Package subscribers.
Sincerely,
Przemyslaw K. Radomski, CFA