Gold Just Broke $4,000, Here’s What the Charts Say Comes Next | Gary Wagner

All right, gold just broke below $4,000 an ounce on the spot side. It's now cheaper than it was just a year ago. Now, it's been knocked down twice in a month, both times by a hot inflation report. Now, the first time it bounced back in a day. This time it fell further the next day. Now, here's the strange part. Central banks bought 42% more gold last quarter than a year earlier, and buying of bars and coins fell about 19%, according to the World Gold Council. So Why are central banks buying more while the demand for bars and coins falls? The Fed decides in four weeks, and my next guest is watching two lines on two charts before then, and one of them is being tested right now. We'll also revisit a Fed rate hike that came just before a major gold rally. Stay with us. All right, welcome back. I'm Jeremy Safran. Gary Wagner, of course, has been in the market since 1983. He co-wrote the book on candlesticks charts, the red and green bars you're about to see, and he also runs thegoldforecast.com. Gary, good to see you, my friend. Excellent to see you, Jeremy. Okay, well, it's been interesting. And we got to talk about this month that we haven't had you on because, and for the audience, I mean, Gary works off the futures chart. So his numbers run a little bit higher than our typical spot prices. Now, Gary, I guess we can put up gold and you can show us this week, because if you're new to charts, here's all you need. Each candle is one day of trading and the body shows where gold opened and where it closed. The thin line shows the high and the low. I guess green means it's closed above where it opened, right? And red means it's closed below. And hot inflation matters because it means the Fed may raise interest rates again. Higher rates tend to hurt gold. So, I mean, Gary, what are this week's candles telling you? Thank you so much. First, I do want to tell you, you explained these beautifully, but we're looking at weekly. And the reason I want to look at weekly is to talk about the fact that I think we could have hit a potential level of support, because realize that in January of this year, we were looking at all-time record highs at the end of January. It then would break down to an incredible low. Recap a little bit. And then now we're back in the correction. And as you correctly stated, we're now below the low that came in in July. And again, these represent weeklies. And so what we're looking at in terms of the most important things on a technical basis, and they pretty much. Believe that there's going to be an imminent rate hike of a quarter percent, small percentages, a half percent. And how much of that has been absorbed into current pricing is the question. But if we are truly at a bottom, we could see gold move up from here. However, I wouldn't see in terms of a year end in the most bullish sentiment. If it finds support here, going between 4,200 to 4,400. And that's because it's been under so much pressure. So that's really my take year end. And I also believe that we have most likely weathered this brutal correction when you consider. At the beginning of this year, gold was at over $5,600, and it came down to these lows today at about $4,888. $3,888, excuse me. I guess, Gary, I don't want to admit we're almost in December, but I guess we'll take November 1st. It's been quite a year that we've had, my friend. The year-end number goes from, when we talked about it, maybe $5,000 over to about $4,399, $4,400. That's about $400 above where gold is right now with, what, we've got seven weeks left. So just explain a little bit about what you need to see to confirm that. What needs to happen first? Well, I've converted the weekly to a daily chart so we can get a better indication. And we can really see the long, protracted, pretty much multi-month correction. Currently, we've got, this is when the CPI came out on the 10th, and we're still moving lower. The question is whether or not it can find support at 39.85 or as low as 38.84. If that's the case, I believe that we could go back into a bullish cycle. The question is, have we weathered this correction? And according to my technical studies, we could have. But we won't know, the one thing about a technical study is that it lags behind real-time data, meaning the fundamental events that drive it. So if we do find support either, as I said, 3970, 3886, we will know because it will start moving up and then we'll see it go through back to 42, 43, 3.44. and that's what we want to see. In other words, I think that there's a real decent probability that we've come to or are close to the bottom of this correction. The question is, it is gone down after hitting this high at 4149, had a couple of days, the 10th and 11th in which it's gone lower. Will it stop? at 39.76 or go lower. If it does go lower, I believe that it should not go much lower than 38.82. If it does, that puts all of these numbers in question because our starting point gets different. Yeah. Yeah. Okay. So if 38.82 breaks, I mean, where's the next stop? Well, that's where it gets kind of tricky because if you look at this long-term chart, this is based on this bottom. Okay. They came in in July, which also loosely matches with this bottom. And some of the wicks go down to about here that matches with this bottom. If we go below, in other words, if we break below a 38, 80 or so, and, and here's where you have to realize. This is all going to change if fundamental events, turn the market bullish, but there's no real area where we can see a strong level of technical support until about $3,500. I don't think it's going to go that low. But the key is this. This is a real long-term view, a much longer term than we've looked at. This is starting back in November of 24 with wave 1, 2, 3, 4, 5. That really completed. During the first week of January, and this year has been about selling off, going lower. We've had one nice bump. That's what our B wave is. And that C is going to determine where the correction ends. And from there, it will start moving higher. So the good news is if we find tentative support in these price points here, we're going to head into what's called another bullish cycle. And I've kind of put that now. where you can see one two three four five and this is projecting out to about the end of 2027 and 28 so this is a multi-year projection the key is have we completed the correction if we have we're probably going to begin a very strong what's called a motive phase and the motive phase is going to be of the longer waves a wave is fractal And so within this wave one, there's counter waves, one, two, three, four, and five. And within this wave two, you get an ABC. And so you can keep subdividing it. On this chart, we've got weeklies up, if we go to dailies, that allows us to go down the fractal chain, so to speak. But my longest term projection, as I said, is to about 27 28. And that's the earliest, I believe. All things being equal, that will see gold trade to a new all-time record high. All right. And that sounds like it'll be next year. So we're in the last leg down if the support holds the next move is up. You know, I got to look at the rest of the market just because it's been interesting on the AI front just to bring this up. But I mean, stocks today are rallying back a little bit and the Russia's safety seems to be fading. I mean, when you're, you know, doing technical analysis, is there any way to check if money is kind of leaving gold for I don't have the proper chart to look at it. What I do have is the US dollar against gold and different points in which they have dramatically changed. You can see how strong back, this is 2014, the dollar index is roughly at 80. It goes substantially higher. I'm sorry, I got to move 102. And then it comes down to 89. And then you get this top here at 113. And here, What's interesting is recently, meaning September 2025, you have a at first you have them copacetic, meaning gold is roughly moving higher right here and the dollar is roughly moving higher. It's unlike points in which you get strong sell-offs in gold and strong dollars. The key is that because gold is paired against the dollar, there's a 100% correlation between dollar strength or weakness and gold strength or weakness. Yeah, well said. So here you see it going up, but it's not going, this is truly a parabolic move in gold. That really ended February of 2026. That's when we got the all time high. And if you look, that's a huge move in a short period of time where the dollar meandered up, which is why we saw gold have such enormous strength. Although we had dollar strength, it was nothing in comparison to how traders were bidding gold prices higher. Yeah, yeah. You know, you brought it up there, Gary, but for, I guess, the audience, I mean, gold is obviously priced in dollars. When the dollar gets stronger, gold usually has a harder time. This week, you know, the dollar hit its highest level since May of 2025. That, according to Bloomberg, when I looked this morning, I mean, Gary, in your Kitco column, you flagged 102.94, the top of the dollars climbed this year. I mean, did it break? Well, on a longer term chart, it certainly did not. If we go to weekly, I'm going to have to pull up another dollar chart, but no, you've got 113, 109, these lows here. The dollar hasn't really broken all-time record highs. It's been in this area before and a little bit higher. Realize that the dollar index is a basket of currencies, composing, I believe, seven or eight other currencies with the euro dollar comprising the vast majority. It's weighted to, I think, 50%, or it's an enormous weight, whereas the other ones, like the yen, might be 10 or 20, and I'm estimating or guesstimating in this case. And so what we're really looking at in the dollar index is for the most part what the dollar is doing against the euro. Yeah, a lot of big funds, it feels like a lot of big funds watch one line, you know, that 200-day moving average. It's the average price over the last 200 trading days. I think gold's below it right now, Gary. Where is that line? And what does gold have to kind of do to get back above it? Let's take a look at that and answer. Let's go to a daily chart and let's pull up, it's called a moving average ribbon. And then from there, we've got a bunch of lines and let's just make this not all about noise. So we're just going to be looking at the 200 day moving average right now. And it is on a daily chart. And you can see quite easily that in terms of the moving averages. It has been below that moving average or broke below in June of 2026 and it broke above for a short period of time. But for the most part, it has been under pressure, which is significant but truthful because gold has been in a multi-month correction. But this is the 200-day right here. They also look at. For short, that's how we gauge a long-term assessment. But they also use the 50-day moving average. The 200 you're looking at, what's the big, big picture? This is the short-term picture. So in order for us to go bullish again, gold would really need to just go to about 40 to 28. And once again, it has been there throughout the year, but only in terms of time-wise from August. Up until September, it was above that. Yes, it's interesting to see that it kind of got above that line for a minute and couldn't stay there. Listen, Gary is on this channel once a month with new levels. We always bring the charts. And if you own gold and silver, subscribe so you don't miss out on the next one. And still to come, we're going to talk about who's selling, who's buying, and the Fed rate hike that came just before a major gold rally. Gary. On that topic, I mean, here's something you won't see on a price chart. On one side, and we'll show this to the audience, on one side, we've got the trend-following funds. Now, they're run by computers that sell. The trend is down, and they're selling gold. Hedge funds bets are on higher gold prices at a five-month low. That's according to Saxo Bank. And then on the other side, central banks bought 321 tons of gold last quarter, up 42% from a year ago. Gold funds held a record 4,256 tons at the end of September, according to the World Gold Council. So You know, computers are selling, central banks are buying, and buying of bars and coins is kind of down. I mean, Gary, in the short run, who wins the fight? The Federal Reserve never looks at the short-term aspect of their dual mandate, which is inflation at an acceptable level, 2% target, and full employment. Those things they scan out for a year and more. They are never short-term. So when they're buying gold, what they're doing is looking extremely long-term to A, buy it, and most importantly, hold it. Because I think why we saw so much buying by the central banks, even though it was moving lower, is they're looking at the fact that if it comes in with support and they're holding it for multiple years, this is when you want to accumulate down in these areas. So they're looking ahead going, relative to where it's been. And as you can see, what I've done is I've taken this chart back to to 2025 to show you what the The bullish alignment looks like, which is what we witnessed the euphoria of last year. You're always going to have the short-term moving average above the longer term. So you've got 50-day moving average in green, 200-day moving average in red. And you can see for the entirety of the year, it's well above it. And then we go into 2026, January, all the way up to here. And at the end of January, it's still above these. And it doesn't break below these until you've seen a substantial sell-off. And that's because historically and by definition, technical indicators lag behind real-time data or market moves. Yeah, yeah. You know, I'm curious. I mean, on a down day like this one, where at least on the spot side, we've seen that little bit of a dip and some selling happen. I mean, how much of the selling is computers and not people? I mean, these algos. It comprises a huge percentage. The hedge funds, the amount of asset classes that they're in, what they're trying to juggle around for their clients, for their entire portfolio, and they're dealing in billions of dollars, couldn't do it without the aid of computer analysis and computer triggers. So if they define certain parameters, those parameters are hit, the algos will go out and buy or sell. All right. So, Gary, I mean, the dollar is pushing its high. Gold is still above your $38.84. Now, the Fed, in a comparison from your own column in Kitco. Now, December 2015, gold was at a six-year low, and the Fed raised interest rates for the first time in nearly a decade. Now, the next day, gold dropped, but it held just above its low, and it went on to, you know, its, I think, best quarter in nearly 30 years. Now, we know that the Fed decides on December 9th markets have fully priced in a quarter point hike. One Fed official called this week's inflation report, quote, borderline disturbing. As according to Bloomberg, this article I was reading this morning. So, I mean, Gary, let's talk about it. You've been in this a while. What's the same now? What's different? What's different is that we came out of a cycle in which we had quantitative easing one, we had whatever they called it, a second round in which they threw tremendous capital into propping up the economy. They took interest rates to near zero a few years ago, I think 25%. Then they slowly built it back up to the current level, three and a half to three and three quarters, And then the raise. But the key is, is that. Consumers have gotten not jaded, but they've acknowledged these lower interest rates, which has allowed them to do something, and the Fed has basically announced they're going to move to a tightening cycle. And once that happens, it changes the entire framework or economic outlook if rates do start ratcheting higher. Right now, the odds are that we'll see another quarter percent rate hike in December. But next year is not as clear. And so the fear, I believe. Is that interest rates that will get out of hand, but move from the three and a half, four percent to five or six. Historically speaking, we've seen interest rates much higher back in the 80s and 90s, but we've gotten spoiled. That was where I'm looking for to having almost free money. And that could end if there's aggressive moves by the Federal Reserve. Those aggressive moves would be a response to inflation moving away from their target. If inflation gets back into check, meaning it starts moving towards 2%, you're going to see a more accommodative Fed. And if you see that, that's the basic scenario where we want. If inflation remains elevated and if it moves to higher ground, the Fed has to react. And the only tool that the Federal Reserve has is to raise or lower rates. And so they're extremely low in comparison. And if they move higher, that's the differential. Now, so I guess in 2015, the Fed was starting from zero. As you said, this time it's starting from nearly 4%. I guess a couple of things. I mean, does that make this hike potentially hurt gold more or less? Because I mean, I guess the question everyone knows is, is December 9th a risk for gold or is that already kind of in the price? I believe, and I could be wrong, but I believe that it's pretty much factored into current pricing. And that's why when we look at this gold dollar chart, you can see dollar strength. The dollar gets stronger when interest rates move up because interest-bearing investments, treasury bonds, bills, they're a better investment, they produce more. And that's why you see gold coming under so much pressure right here from about August. All the way to current pricing in October and November. Yeah, yeah. So, I mean, even 5%, 6%, that's low next to history. So, I mean, higher rates alone don't break gold. No. In fact, it used to be that... It does pressure. It does provide headwinds when rates go up because they can move their money, which is a guaranteed return into a fixed income. So it can definitely put headwinds against gold. Gold's running against the wind rather than the wind behind its back. But they can move independently. And the key is what's going on in the world that's causing rates and whether there's political unrest, whether or not the economies are thriving, and that's the core of it. Yeah, yeah. All right, now on to silver. I get more mail about silver than anything else, Gary. Now, in 2011, silver peaked just under $50. That's price capped it for more than about a decade. Earlier this month, silver dipped below that old high, then climbed back to about, what, $52. I mean, chart readers say an old ceiling can become a new floor, Gary. Did silver just Just pass that test. Well, take a look at this. This is going back from January 1980 and silver peaks out, 47 goes down. And then again, you get in 2011, it peaking. This is an incredible double top. Silver falls out of bed after hitting $1.20 per ounce. It has a parabolic move down. And if you look at that and you define it exactly the way we like to describe it, One man's ceiling is another man's floor. Here it's resistance. It went to this price point, couldn't overcame. couldn't overcome it, went lower, came to the same price point, couldn't overcome it, went lower. Here it broke well above it. It pretty much more than doubled in price. And then look where we're at now. We are really at this level. And that's why in terms of long-term charts, myself included, market technicians are shaking their head going, this is a strange occurrence. We haven't seen that in gold. We haven't seen that in any other stock or commodity that I'm aware of where you have these peaks that are separated by years, 79. to 2011 a lot of years and then again now in 2026 so these are long-term economic cycles and this is how silver's reacted i'm actually under the belief that if silver gets a foothold here it should outperform gold in terms of percentage gains next year rather than it being The reverse. Yeah. Yeah, it's fascinating to kind of watch. 1980, 2011, 2026, the first two stopped at 50. That one went to 121. I mean, does that make $50 a stronger floor than it's ever been? Absolutely. On a technical basis, you've got historical precedents to see that it couldn't overcome it. And again, this is like if you're on the first floor and you look up, this is your ceiling. If I'm in an apartment on the second floor, this is my floor. So that's why support and resistance are part and parcel of the same thing. This was resistance here, resistance here, it could easily now become support. And that's why people are really excited about silver. Yeah, yeah. I mean, gold is down on a day that silver's up. I mean, not much, but is silver telling us something gold isn't here? We've seen a divergence, absolutely, between the way gold and silver move. They typically move in tandem if you look at a medium to long term. If you look at what I call the noise and minutiae, intraday charts or daily, and today's an example, you will get silver moving up and gold moving down. as a whole they tend to move in tandem but depending on the percentage moves in other words both gold and silver up but silver's moved up five percent and gold's moved up three percent that gold silver ratio reflects that and that's why that's an interesting thing to look at but you don't have to be a rocket scientist to look at this chart and see that this is an incredible peak it's matched here it's one of the longest term double tops i've seen in history it flew I flew through this and from here, It built so much momentum, it went from $50 to above $120. Now, you can see these are all wicks. They're not even real bodies. It never closed in the area. In fact, again, and this is going to be a monthly chart, the highest close on record on a monthly basis in silver occurred in February of this year. This, of course, is January, but that's a wick. It went to there, but it closed here. And so, yeah, this is significant. And if we blow that up, you can see how strong this move down has been. And the fact that it does on a monthly basis, and we're a good ways through the month, about a third of the way through the month, we get a solid move. I think that silver could be off to the races towards the end of this year and carry over to next year. Okay, yeah. And I guess, you know, people are going to be asking me, if 50 fails, where does silver go? I mean, you don't know, but you're watching for that because it's been sitting here hovering around that price. I mean, we would have to switch our parameters a lot. What a chart. You've got, yeah, this is now we're looking, this is still weekly. If it doesn't hold here, the next point would be about 46. Your question was how low it could go. On a technical basis, this is where it could find support. But relative, you see a nice, slow, gradual upward path. And so here's the parabolic move up. Here we've got a strong sell-off. This was more of a gradual sell-off, but you had one, two, three, four, five. Five lower months, meaning it opened at a price and closed below that on a monthly basis. Out of the last seven months, five of those months had that happen to it. So it's been under tremendous pressure. This is the first month, really, that we're seeing some kind of a green candle forming. That's why I'm excited about it. Yeah. It's been pretty wild to watch, Gary. Okay, well, listen, three numbers kind of here that people can kind of watch. I promised it from the beginning. Short answers, I believe in you. I mean, you gave us gold probably ending around $43.99 by year end. Where do you think silver finishes the year? Silver is definitely in more of an upswing, and I think that we could see at the end of the year, realize that these are monthly moves. So typically you've got $54 to $57. $3 moves is pretty strong. We've already seen it go up $49.5. to 51 we've gotten a three dollar move let's say we get another three dollar move we could see silver trade as high as maybe uh 56.50 to 56.90 by the end of the year i would have to be a little bit more conservative and look at 55 as a logical number, but realize it's at $49. It's still a tremendous move for silver. Yeah, yeah. And on that gold front too, Gary, I should ask you, I mean, the gold price that would kind of change your view on that $43.99, is that still $38.84? It's got, you can see this double bottom, July of '26, and then again, November. the thing that makes me bullish is after it completed this long correction if in fact it's concluded we should go back into a a strong bullish cycle if we start to break below these points as i said that becomes a concern to me and this is what a fully bullish market looks like in in hindsight 2024 you see you get your cross with the 50-day going above the 200 and look at the between the 50 day and 200 see how it widens. And that's what you look for in terms of a long term basis. Now we're in a bearish scenario in which the long term is above the short term. We'd want to see those cross back. That's long term moves. If that helps your audience again. Yeah, absolutely. All right, Gary, thank you for giving us two lines anyone can watch. Not just a forecast, of course. You can find Gary over at thegoldforecast.com. You've been pretty busy this year over there. Absolutely. This has been one exciting year. And thegoldforecast.com is where you can watch a lot of old videos in our YouTube channel. We do offer Kitco a special pricing that's going to be good through the end of the month. And that's 30% off for those that want to see a daily video from us, as well as daily commentary. When you go to the pricing page, there's a coupon box, you type Kitco in, it will readjust the pricing, you get 30% off. All right, Gary. Appreciate this. Of course, you can head over that with the coupon code. I know you mentioned it's over this month. People watching, exciting time for gold. Mahalo, my friend. Thank you so much for having me. And we'll speak before the end of the year and see how things really turned out this year. We'll see you in a month. All right. If this help you make sense of gold this week, be sure to hit subscribe. The next read on these levels will be right here, of course, on Kitco News. Now, one question for you in the comments with gold under $4,000 on the spot side, are you buying? Are you waiting for lower? Tell us which. I'm Jeremy Safran. Thanks again for watching Kitco News. We'll see you next time.