Gold Silver Weekly Update 150826

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The two sets of charts [(1) Last week actual vs forecasted (2) The week ahead]  above  and the executive summary  below sums up all I have to say. But I would like to add that the day for a cataclysmic reckoning of the US national debt draws ever closer, accelerated by the stand-off in Iran. Also, the probability of this being triggered by the unwinding of the Yen Carry Trade is very real and could be very soon. Looking at the output of the Long Shot 95th quantile of our models, plus with US 30-year Treasury at 5.23 % and Japanese 30-year JGB at 4.02 %; plus AI Bubble burst and stock market crashing ,Gold at US$10,000 an ounce  and Silver at US$140 an ounce by year end is not an impossibility. Of course my opinion is ceteris paribus and rebus sic stantibus which are the legal terms  for "all things being equal" and "things as they are i.e. fundamentals remain unchanged" which in a Trumpian world can be quite a stretch of the imagination. 

What the numbers are telling us

• Direction: Correct. Both metals moved up, exactly as the model predicted. No arguments there.

• Speed: Faster than expected. The Base Case (Q50) scenario for Gold was $4,153 and for Silver was $59.55 — targets meant to be reached over 20 trading days. Both metals blew past those levels in five days. The model called the destination right but underestimated how fast the train would move.

• Gold already past its Best Case. Gold at $4,401 is sitting 1.7% above the Q90 "Best Case" level of $4,329. That was meant to be the target for an optimistic outcome over a full month — gold reached it in one week. The only level still ahead in the old forecast is the Long Shot Q95 at $4,559, which gold needs a further 3.5% gain to reach.

• Silver knocking on the door of Best Case. Silver at $63.80 is just $1.27 short (-2.0%) of its Q90 Best Case of $65.07. Having blown through the Floor, Base Case, and Q75 levels, silver is now pressing against its own Best Case target with 15 trading days still left in the forecast window.

• The gradient in the "Actual vs Forecast" row. Read that row left to right: Gold beat Q10 by +11%, beat Q50 by +6%, beat Q90 by +2%, missed Q95 by -3.5%. Silver: +17%, +7%, -2%, -10%. This monotonically declining pattern is clean. It tells you the move was large but orderly — not a panic spike that randomly blew through everything. Prices climbed hard enough to clear most scenarios but still respect the Long Shot ceiling.

• Silver's bigger percentage beats are a reminder of its volatility. Silver beat its Floor scenario by 16.8% versus gold's 11.1%. Silver always moves in bigger percentage swings. When it goes, it goes. When it corrects, it corrects sharply too — which is why the model's near-term caution signal on silver (see Part 2) deserves attention.


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