The $6,000 Gold Call Is Dead, Here's His New Target | Gary Wagner

Welcome back. I'm Jeremy Safran. Well, a month ago, our own Gary Wagner came on this show and killed his own $6,000 target on gold. He said that the market was trading a rate hike and that a rate hike is obviously poison for gold. Now, those odds have since cut in half and not to zero, but it's better than a one in three. Now, gold went up about $300 anyway on the spot side. So either way, something has changed or he was right all along. Now, today we find out which. So stick with us. All right. Joining me now, of course, Gary Wagner of TheGoldForecast.com, Kitco technical analyst reading these markets for more than four decades. Gary, great to have you here on my first day back after a quick little family vacation. Doesn't feel like I missed anything, hey? You deserved it regardless if you did or if you did not. But, you know, we've got a new chairman and that's the most critical thing I think that people are looking at. Because we have seen a walk back, so to speak, on some of the traditional fundamentals such as geopolitical uncertainty that has kind of waned in the effect. It seems like investors are focused primarily on interest rates. We've got more information now that the new chairman has attended his first FOMC meeting. Yeah, yeah. Good point. And, of course, we've got some more things coming up. I'll ask you about a little bit later on. Jackson Hole coming up as well. But just a quick note for everyone watching in case you're joining us. I mean, we show spot prices on the Kitco charts. Gary trades futures. Those numbers will be close to ours, but not identical. And I kind of wanted to start off with that month ago where we where we left off here, Gary. I mean, the thing that kind of killed your your call got cut in half. It didn't go away. But since then, the odds of a September hike have gone from about 80 percent at the late July peak to around 38 today, according to the CME FedWatch tool. So, I mean, even Goldman's chief economist calls it very unlikely. So does the six thousand dollar gold call come back now? Not right now. Obviously, if you make a call and the market data doesn't support it short term, we continue to move lower. I had to modify that target. Six thousand was that right now what I'm looking at is if I look at the all time record highs, fifty five hundred, fifty four hundred in that area. I think that five thousand of fifty one hundred on the high side is what we could get out of this year, which, of course, is not the highest level we have seen. Gold traded to its all time record high earlier this year. And so now we have clear cut points of resistance after moving down from about fifty five hundred or so and then hitting roughly in this space is futures. But there'll be, I think, about ten dollars apart, December gold and spot. But we saw actually break below four thousand. And when we look at some charts, I'll tell you why it was interesting to me in terms of the real bodies and what we call the wicks on a candlestick and the lows that came in. It was very telling that it could be really potential support. And that's what occurred. OK, well, this is interesting because, I mean, you know, again, last month you told me that this market was obviously under pressure. I mean, we had those lower highs, lower lows, as you were talking about, every bounce kind of failing below the last one. You know, we've just had those three this three hundred dollar move. So is this the turn or is it still kind of a bounce inside a downtrend that the serious money test in September? What are your thoughts? When I look at what happened 2011, 2012, which was the run up to then the all time record high, and it moved above nineteen hundred dollars per ounce for the first time in history. And what we saw was really a multi-year correction that took it to about a thousand twenty. If I recall, it was February. It was reported that George Soros was accumulating heavily and the market took off from about a thousand and slowly moved up. What we saw during this correction is incredible move, new record high. But at the same time, when it came down, it came down to about four thousand dollars. And so to look at it, when you see this kind of run and see how aggressively it really maintained a price point. Let me move this just a little bit to get this out of the way. A price point, as you can see, where the wicks kind of flirted with. I've got it at ninety thirty nine sixty eight and it kind of matches up with these lows here. And so now we've got a much more clear path in terms of what areas to look for, for resistance, for support, only because now it's back trading in a range. It's been to this price point before. It makes new lows. It tells us one thing, but we know on a technical basis where to plot it, because even though even the most staunch technicians acknowledge that it's fundamental events that move the market. But what's great about technical indicators is they give us good readings for entry and exit points, levels that could be supported resistance. And so the four thousand that we saw recently, I mean, if you know, if we go back just to July, this really was a base. You can see how it traded with lower high, lower high all the way down. You had a series of lower lows. And so what excuse me, what I saw was a descending top and a flat bottom. It is one kind of the triangle patterns. And typically when you get this kind of a pattern in a downtrend, more times than not, it'll break to the downside. In other words, it will break to the prevalent direction of the current trend, which was down. It did not. And when it broke above that, it did so really with fury. And I'm looking at weekly charts to kind of give you an idea and smooth that out. But, yeah, we definitely hit a bottom. We hit a bottom that lasted in terms of time for about a month and a half. And then during one week, we really had this market move on Monday, third day of August. And it hasn't looked back since. Now, listen, on the spot side, I'm just taking a look at my my terminal here. It's similar, right? Hitting that forty four hundred almost level forty three eighty and then coming back up again, being bought up. So last time, you know, you kind of gave me two ceilings, forty three seventy and forty five hundred. Now, I guess it was the first one to kind of go through and we've been up against that forty four thirty level. I just wanted to kind of ask you, I mean, walk me through, bring up that chart, walk me through what sits between here and forty five hundred dollars. And what happens to the people who are long if we fail there? Depending on where they got in anywhere in this bottom, they're in great shape in a futures trade. Which is much more a whole different set of rules that you follow when you accumulate. I'll buy gold at a certain point and I let it sit. I'm not bothered by a three, four hundred dollar drawdown per ounce. It's not the world is ending. I have the physical gold. I'm not buckled in by time because you have it for as long as you want. When you're trading, you don't really take that kind of a risk reward ratio. First of all, especially in futures, the big news is leverage. Leverage gives you maximum buying power. And I tell people that aren't familiar with how that relates in the business world is when you get a mortgage, if you put 20 percent down on a five hundred thousand dollar house, when it moves up a hundred thousand, although you had a down payment equivalent roughly in that area to that. At the same time, you you've doubled the money that you put in for the down payment. So it's a leverage that has a potential for great reward, but obviously the potential for extended risk. One doesn't go without the other. So as it came down, the key to me was you hit this record high. We did. You know, it took quite a few people by surprise. I was one of them. I didn't think it would get that high. Then we had a really exaggerated low. And you saw something happening, especially on a weekly chart in which you had all of the range of each week to really be right around and above 4000. And that told me that there's a really strong possibility that we are looking at the correction. Hey, where is the the 200 day kind of sitting here? I mean, for anyone knew that's the line most technicians used to separate an uptrend from a downtrend. But I mean, I'm curious to kind of get your thoughts on that, because I mean, the 30 year just hit 529 highest since 2007 rising. You know, long yields are supposed to be headwind for gold and gold's going up anyway. So, I mean, is the correlation broken or is one of those. I mean, the red line here is the 200 day. Yeah. 100 day and then 21 day short term. They're all simple moving averages. So effectively, what we look for a couple of things. One, we want to see the relationship, for example, between the 100 and blue and the 200. You can see how they widen. They move farther apart. That is what you want to see in a bullish market. That also tells you when you have the longest term moving average at the lowest value. What that tells you is that it's in full bullish alignment. And obviously it ran out of that. Hey, Gary, you know, you're also the one who kind of told me that the serious money comes back in September, as we know. Right. And that's when the volume starts to spike. So is this is this real or is it a thin market move? Well, let's go ahead and pull up the volume if if we can. And I think what you'll see is that it's not really that thin. There's in gold, there's always volume. Now you can see the peaks that came in here and here in volume. It has gone down a little bit. But if we look at this level here, moving back, you can see that the volume has gone into what I call a typical summertime volume. It does thin out a bit, but it's not like it disappears. And the liquidity is very robust in gold, meaning you can typically get in or out roughly where the prices between the ask bid. And you don't have what we call slippage when you trade the most active contract month. The differential now is not that much. And these are December futures contracts they're calling most active. So there's a lot of time left and we have definitely broke above this upper level trend line that was marking the resistance, the lower lows. And then obviously, when these candles came in again on a weekly because it will smooth it out, you can see that it really formed a solid base for well over a month. And then the breakout was incredible during the first week of August. You know, listen, I was, as I mentioned, just this one week off with the family and, you know, the gold's moving up incredibly high. It's been an interesting volatile market and it happens fast. But let me put a person in the middle of this because I was getting written emails while I was off. I mean, gold obviously hit that roughly that fifty six hundred dollars in late January. That record silver hit one hundred and twenty one. A lot of people bought those numbers. I mean, there's still about 20 percent down on gold, closer to half on silver. I mean, you told me where this kind of goes, if it works. Where's the line where somebody who bought that high should kind of stop hoping? I have to differentiate between trading on futures with huge leverage and accumulating physical gold, physical gold. Typically, you're in it for the long run. You don't usually flip within months or even a half year period. You'll keep it for a couple of years. In futures, because of that liquidity, you can see. So, for example, this one week after it started coming down, it opens at five thousand and closes by the end of the week at forty five hundred. So about a 10 percent drop in a single week. And then it was an incremental slower move on the way up. Typically, if markets rallying, you don't get huge spikes. And when you get these huge spikes, a lot of time they become unsustainable. And that's what we saw here, a small retracement. We had a phenomenal move, a phenomenal move. If you look back, even as far as January twenty twenty five, you're looking a couple of years back and gold was at twenty six seventy. Let's say that's a huge move. And I think although he was talking about interest rates, Paul Volcker, the former chairman of the Fed, said when asked, he said, well, trees don't grow to the sky. They never have. They never will. And I thought, what is this succinct way to put there's always going to be an absolute top of the market. Even in a runaway market like this, they won't gold won't go to the sky, although I think it tried to touch a cloud or two there. But the key is, is that these types of corrections where you've got a long, very long, you know, as I say, I'm I'm taking this this one leg of the rally from January twenty five up to March twenty six. So when you consider the amount of time it took and then the amount of time it took to retrace, the retracement is absolutely fair. We can always go in and do this. That was a lot of fun there, Gary, covering that with you that that year. What a run, huh? Absolutely. Absolutely. What I've done is I have smoothed out the upper level trend line. So what I'm looking for is where it actually broke above. And on the weekly basis, that's why I'm not looking at it daily. You see that clear breakout. That's a fairly decent move from just above forty one hundred. And at the end of the week, right above forty four hundred. So that was a real good move. And then it slowed down. Right now I've got a couple of levels of support. I had to redefine them because, of course, they were much lower. Right now I'm seeing forty two hundred as absolutely major support. But there is good support and a case to be made of forty three sixty with resistance coming in around forty six forty four. And these are just based upon Fibonacci numbers. Forty resistance. Forty six. Forty four, you said, because I want to talk about that downside. I mean, gold just got back above its 100 day average for the first time since April. I mean, give me again that kind of first closing level below here that tells you that this recovery is finished. Not not, you know, an interstate wick, maybe just a close. When you say recovery is finished, you mean if it continues to move higher, where could it find a wall that isn't sustainable? Yeah. Or are you talking about the lows? The lows here on this one, Gary, I just want to know if it finishes or closes below this level here. Maybe you're a little worried that this recovery is is not going to continue. Well, I mean, this green line is important for common rounded up forty three fifty. And we're currently well above that, well above that. And so this would be a short term resistance and excuse me, short term support and then major support. Major support. Forty two hundred short term support. Forty three. Fifty seven with gold about to if it continues to move higher challenge. Forty five hundred dollars. Once again. Yeah. Back here again. I'm going to get to continue to watch it, of course. OK, well, listen, silver's been, you know, the real story here. It's up more than twice what gold is today. When you were last on it, it lost 200, you know, lost its 200 that day, I think. So, I mean, has it taken that back? And is this, you know, the outperformance that you said we'd get on the way up? Or is it just kind of still one session is noise? Well, the similarities in gold and silver in terms of price range, percentage gains and losses is if you look at January 29th, that's when gold topped a series of lower lows. But the fact that silver broke 100 effectively resulted in the largest percentage gain where silver outperform gold. And during a rally, typically gold outperforms silver in terms of percentage gains. During a drawdown, silver can easily outperform gold. One is the liquidity and volume, the open interest number of contracts. And silver is not traded with as many contracts as gold is, so you have a different liquidity. But in terms of the year, I was really, you know, when we consider that at the beginning of the year, we saw silver move not only past 100, but 123, because its base and ceiling was at around, you know, about 60 to 65. In terms of the records we witnessed prior to that, as you can see, there was this slow methodical move up as we were trading through 2025, taking a small dip, and you get almost a parabolic move to the top. And the top was roughly double of what we saw as a baseline for silver. You know, gold's somewhat the same, but you get wider moves. Yeah, yeah. I mean, you know, again, silver put its low, I guess, for the year back in July. It ended the month near 57, 50. It's printed 66, 68. So, I mean, you know, a lot of people talk about the gold-silver ratio. And for anyone kind of new, that's just how many ounces of silver it takes to buy an ounce of gold. It's come in from about 69 and a half to around 67 in 11 days. So, do you trade the ratio as its own chart at all, Gary, or is this still just noise and it's starting to signal something? I look at the ratio, but if I'm bullish on gold, typically I'm bullish on silver. As I said, they tend to move in tandem. The difference is the percent gains or percent drawdowns, which can be significantly larger on silver. And I think part of it has to do with the fact that in silver, there is less open interest, meaning there's less a buy to a sell equals one contract. That's open interest. And there's less open interest, less volume, let's say. And therefore, it will react more sensitive to the same fundamental events. Big week, I guess, a big month coming into September as well. Hey, something I should have asked you last time, Gary, I mean, you trade this, you don't just chart it. So, I mean, are you long here? And if you are, I mean, do you have a stop somewhere? Actually, what I've done for about the last, say, 10 months is I've gone heavily into accumulation for storage. You know, I'm not going to touch it. And I tended to buy a lot of the metals at a more favorable price. I started buying, I remember, at around $1,500, I bought it at $2,000, and I've still got that. So I was basically dollar cost averaging on the way up. As it came down, I'm dollar cost averaging the losses. But I'm not under the guise of the leverage. I've traded futures since 1990, let's say, so quite a few years. I made a lot of money. I've also taken some sizable hits in different markets, brains being one of them, when I was on vacation and left a large position open. But for me, if you're going to trade it, you want to get short-term gains and you want to have, you're going to have that leverage in futures, then it's much more sensitive. You would get stopped out in a modicum of areas in both gold and silver as it went down. Because in a rougher way, let me blow this up, you see the series high, lower high, lower high, lower high. And you see the base it formed in it. And it held to 5,600, even maybe 5,590, which was a very strong level that used to be major resistance for silver years ago and now had become support. We haven't seen gold react in the same way because the major resistance became around $2,000 after it traded between 1,800 and 1,900, flirted back and forth, and then it popped just above 1,900. And many people thought, okay, this is when it's going to go up to another century market, 2,000. And that's when it got slammed and roughly halved. When we look at gold right now, it's about a third. We went from 55 to 4,000. But look at the base it was building. I'll have to recenter that. But you can see the slow and methodical move, and then you see it accelerating. The correction was almost shallow as heck, I mean. And then it went up, but there weren't parabolic moves. But you have a number of periods where it's a green candle, which simply means that the closing price is above the opening price, draw it in green. If the closing price is below, you draw it in red. And you had an abundance of green candles on the way up. On the way down, it sold off. I said exaggerated, really because of the low that came in down here. Went up, and then it just meandered slowly. And this was a very logical point to look at because they tested, in essence, 4,400 for so many weeks. And effectively, every time the wick, meaning the differential between the real body and the low of the candle, held above 4,000. And it was for a fairly long period of time where you don't see a series of time where it moves sideways. This is like a rounded bottom. These are all stair steps, accelerates, small correction. But it's not like when it sells off, it can be brutal. You get exaggerated new lows coming in simply because once stops start getting hit, there's a liquidation in the fear of remaining long. In terms of it's hard to pick a bottom as it's coming down in a fast and furious way. Now, listen, I mean, you said it here, Gary, that distinction matters. You're stacking physical even while the trading chart still needs confirmation. So there's something there I'm sure some of the stackers will be happy to hear. I wanted to kind of ask you to step back from this week for a second. I mean, four decades of reading these markets. What is that kind of one signal that's held up across all of it? And what would you say is maybe the one that that used to work and it doesn't anymore? Well, the one that used to work that doesn't seem to have the same punch is wars or geopolitical uncertainty. The U.S. went to war with Iran and gold went down. Silver went down. And typically when there's that kind of uncertainty or geopolitical tension, gold would react in a bullish manner. We did not see that. So if we're not seeing it there, what are investors, hedge fund managers, professional traders, what are they looking at for kind of a forward guidance? And especially because Chairman Powell has exited his role, he's still there for a small amount of time. And we have a new Fed chairman for the first time in a long time. We're not certain how hawkish he's going to be. And what we're seeing is, I mean, he came out almost like a political statement. He was stuck. We're going to tackle 2 percent inflation. We're going to use the tools we have and make them take that level down. And in this case, his his bark was louder than his bite, so to speak. In other words, he carried a big stick, but he didn't really use it. We're not seeing him be it's easy to say it out of out of the not the limelight, but out of being one of the primary cogs that controls that and that affects the economy and employment. All of those things. Once he got in the seat, those words, I remember him, but I didn't see him act on that. And and so we're seeing that he's acting with maybe more patience or prudence. His target is 2 percent, but obviously he's not going to reach short term. And that's where I think we got a key level of difference is geopolitical tension used to be a primary motivating factor, specifically for gold that would move prices higher. We did not see that during the last this last war, recent war in which the USA and Iran went at it. We attacked and they started hitting all kinds of targets and wars and nasty business. You know, I it's the one thing I enjoy seeing gold move up, but not at the cost of that. But that's just the reality of the world. Last one here. It kind of kind of comes back to that here because, I mean, you flagged this yourself a month ago, August 27th. Right. I mean, you called it a big one. Warsh gives his first keynote as chair on the 28th. I'm just curious. I mean, what does a hawkish surprise due to forty five hundred dollar gold? Anything here? Well, a hawkish surprise. In other words, right now we're anticipating a rate hike of a quarter percent in September, maybe one other quarter percent or a half percent total by the end of the year. That's not really all that hawkish right now, especially when you consider where the current Fed funds rates rest. I I think that he's tempered by the awareness of the position he has and and how it affects people to the point where if he continues to act the way he has. And it doesn't matter what he wants inflation to do or what he wants interest or where he wants interest rates to be. The talks usually inflation and their interest rates are the only tool they have to control it. Again, his his bite is smaller than his bark. He's he's he's really preaching a solid game of hawkishness and he's not delivering that. That could change. But it's not as hawkish as many people anticipated it might be. And that's why you saw gold recently, I believe partially the reason the gold moved higher and silver moved higher. Yeah, because it's against the basic principle that when you have war, geopolitical tension, that tends to be extremely bullish gold because it ratchets up the uncertainty factor. For whatever reason, that diminished on this particular run. All right. Yeah, I appreciate I appreciate this. Of course, appreciate the levels. Hey, just remind people again where to find your work. Thank you. The gold forecast dot com. That's our dedicated Web site. We also have the gold forecast on YouTube. And for the summer, we're going to continue to run. If you do decide to be a primary member, you'll get five reports a week and you can get 30 percent off by typing Kiko in the coupon box. All right. Which is the best value we've had in since we started pricing it back in 2010. All right. And hey, thanks again for putting your numbers on the record, a call that you've already even changed. Not everyone does that. Of course, Gary Wagner from the gold forecast dot com reading the charts. Thanks, Garrett. Thank you for having me. All right. We'll talk soon. So it comes down to two lines of gun above forty three fifty. This keeps earning some trust below thirty nine ninety eight. The chart opens a little bit of a door, maybe lower. The last time I gave you four thousand one hundred and thirty nine twenty. Now we closed above the first one and never touched a second. Those two numbers hold up until the chart says otherwise. So if you're finding this later, there's still one that matters. Now, tell me in the comments, of course, which of these two go first. I'm Jeremy Saffron. Thanks for watching Kiko News.