Author: AG Thorson
Compiled by Deep潮 TechFlow
DeepTide Summary: Certified Market Technician (CMT) AG Thorson assesses that, following the U.S. Treasury’s announcement on Wednesday of a bond buyback program aimed at suppressing long-term yields, the U.S. dollar broke below its 200-day moving average, triggering a broad rally across precious metals. Gold, silver, and platinum have all confirmed mid-year bottoms and are restarting their upward trends. Mining stocks (GDX) have surged over 40% from their lows and are expected to reach new all-time highs within the year. Although Bitcoin surged in response to the buyback news and White House crypto events, triggering a record $3 billion in short liquidations, the analyst still maintains his forecast of a “final drop in September, with a potential bottom near $40,000 in October”—though his confidence in this view is weakening.
Key Points
- U.S. Treasury repurchase news from the Department of the Treasury pushed the dollar below its 200-day moving average, boosting gains across all precious metals.
- Gold, silver, and platinum have all rebounded from their mid-year lows, and mining stocks have surged over 40%, with further leadership expected.
- Bitcoin has reclaimed the 200-day moving average, weakening the argument for a final drop to $40,000 before October.
On Wednesday, the U.S. Treasury announced a Treasury buyback program aimed at suppressing long-term bond yields. The dollar immediately fell below its 200-day moving average, prompting a sharp rally in precious metals, with mining stocks leading the gains.
Bitcoin also surged sharply, triggering significant short covering. Short-term indicators suggest a possible top next week; the author still expects one final dip before October—but confidence in this scenario is weakening.
The Gold Cycle Indicator reading has risen to 119—price has exited the cycle bottom.
Chart: Gold Cycle Indicator rises to 119, with price exiting the cycle bottom. Source: GoldPredict.com
The U.S. dollar falls below the 200-day moving average
Dollar Index: Affected by Wednesday’s Treasury repo news, the dollar fell below its 200-day moving average, reinforcing the view that a major top formed in June. A temporary rebound is possible, but the overall downtrend is expected to resume, with prices potentially falling below 90 next year.
Chart: The U.S. Dollar Index has fallen below its 200-day moving average, potentially peaking in June. Source: StockCharts.com
Crude oil is testing the upper boundary.
WTI Crude Oil: Oil prices are testing the upper boundary; a sustained close above $88 would support a breakout. Such a move could elevate inflation and put upward pressure on long-term Treasury yields.
Chart: WTI oil tests its upper boundary; $88 is a key level for a potential breakout. Source: StockCharts.com
Gold formed a significant low in mid-year.
Gold: As previously predicted, gold formed a significant low in mid-year, and the upward trend has now resumed. Although it may take some time for the price to sustainably reclaim $5,000, we expect gold to ultimately exceed $7,000 next year before reaching its next major peak.
Chart: Gold has rebounded from its mid-year low, with the overall uptrend restarting. Source: StockCharts.com
Silver also formed a significant low in mid-year.
Silver: As predicted, silver formed a significant bottom in mid-year, and the upward trend has now resumed. We expect the price to consolidate between $90 and $100 before reaching a new all-time high next year, likely in the second half.
Chart: Silver has turned upward from its mid-year low and broken above the downward resistance line. Source: StockCharts.com
Platinum has broken below the cyclical downtrend line.
Platinum: Platinum has broken above its cyclical downtrend line, confirming the formation of a significant bottom. We anticipate resistance in the $2,200–$2,400 range, after which the price is expected to reach a new all-time high next year.
Chart: Platinum breaks below the cyclical downtrend line, confirming the formation of a significant bottom. Source: StockCharts.com
Mining stocks are taking over the lead from gold.
GDX: Gold miner stocks, as predicted, formed a low in mid-year and have since surged over 40% from that bottom. This validates our outlook for their continued outperformance and supports the view that gold miner stocks are taking over the leadership role from gold itself. We expect miner stocks to reach new all-time highs well before gold, likely before the end of the year.
Chart: GDX has surged from its mid-year low, with gold miner stocks taking the lead. Source: StockCharts.com
Small mining companies found support at the 200-day moving average.
GDXJ: Junior mining companies have held above the 200-day moving average and do not appear likely to experience a meaningful pullback.
Chart: GDXJ holds above the 200-day moving average, continuing its rebound from the major bottom. Source: StockCharts.com
The junior silver miner rebounded immediately after retracing to the trendline.
SILJ: After retracing to the trendline, the junior silver miner immediately reversed upward. July may have marked a significant low, and the author continues to believe its price will reach new highs well before silver does.
Chart: SILJ reversed upward after retracing to the trendline, forming a significant bottom in July. Source: StockCharts.com
Bitcoin surged momentarily on news of treasury repurchase agreements.
Bitcoin: Bitcoin initially surged on news of Treasury repurchase operations, then accelerated upward during a bullish White House crypto event, resulting in massive short covering and a record $3 billion in liquidations.
In the short term, cycle indicators support the possibility of a peak around August 25–26. However, as the price returns above the 200-day moving average, the author acknowledges that one—or possibly both—of these assumptions may be incorrect: either the price will not drop to $40,000, or the bottom will not occur in October.
The author still believes that September could mark the beginning of the final round of liquidation. From an emotional standpoint, Bitcoin needs to break below $50,000 to completely eliminate the remaining long positions. If prices do not decline significantly in September, he will be wrong, and the market may bottom out approximately three months earlier than expected.
Chart: Bitcoin rebounds above the 200-day moving average, accelerating short covering. Source: StockCharts.com
Bitcoin equilibrium price
Bitcoin bottoms like clockwork every four years, and in each cycle, the price has at least tested or broken below the equilibrium price—currently $39,880. For this reason, the author has been anticipating a test of $40,000 over the past six months.
He still believes there is a high likelihood of another decline before October. Therefore, this could be the final rally before the last drop—but time will tell.
Chart: Bitcoin's equilibrium price remains near $40,000, after previously marking a four-year cycle low. Source: Look Into Bitcoin
Conclusion
Watch for price movements around Warsh’s speech at Jackson Hole next week.
It's not surprising to see a pullback in metals and mining stocks, but overall, prices appear to have marked a significant bottom in June and July, as predicted.
Gold needs time to sustainably reclaim $5,000, and silver must regain above $100, but we expect both to reach new all-time highs next year, with mining stocks likely leading the rally.
AG Thorson is a Chartered Market Technician (CMT) and a technical analysis expert.