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Gold and silver: an accurate sell signal could cloud the precious metals rally

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Gold and silver have performed strongly over the past two years as investors prepare for the impending recession by investing capital in precious metals – which are commonly used as a means of maintaining prosperity during an economic crisis.

Although the recession is just beginning, these assets may need to be heavily revised, according to an incredibly accurate sell signal from an indicator developed by a world-renowned market timing expert.

Gold and silver rally could be tarnished by TD 9 futures sell signal

Precious metals have spent the better half of the past two years on a slow upward trend to prepare for the impending recession and are here now.

Gold and silver had risen sharply at the beginning of the year, but as with all assets, a massive sell-off when the corona virus peaked caused these precious metals to crash.

Related Reading Silver, gold and bitcoin: even safe havens cannot withstand the corona virus

The two later recovered sharply and gold recently hit a new 7-year high after gaining 7% in April.

However, these rallies could end or at least temporarily decline, as can be seen from an accurate sell signal from the TD Sequential indicator created by Thomas Demark.

The TD Sequential display emits a signal after 9 consecutive candles in a row have met certain requirements. The tool was used to accurately track many crypto tops and bottoms, including the Bitcoin peak at $ 20,000, the bottom at $ 3,200, and the most recent top at $ 10,500.

The tool is just as reliable in other financial markets. Now the signal only appeared on gold and silver futures.

Gold futures price chart

Silver futures price chart

With the impending recession, all dips are for purchase

While the exact sell signal indicates a decline in gold and silver, all slumps are for buying as precious metals are likely to continue rising in the current economic climate. Fed pressures are lowering the value of money as hard assets like gold and silver grow in value.

Gold may have risen 7% this month, hitting new 7-year highs. However, according to other indicators for technical analysis, there is still a lot of fuel in the tank. And since the supply is so limited due to the pandemic shutdown, the demand only exceeds what is available to investors.

Related Reading Gold is tapping a new high, indicators show that the rally has more fuel in the tank

The RSI is falling and the directional movement index is diverging, showing that the current upward trend is only increasing in strength.

The indicators do not rule out a short-term retreat, which could be a profitable chance to buy at lower prices given the dynamic behind gold.

Featured image from Pixabay

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