Gold/Silver Weekly Update 07 Nov 26

There are nascent signals that the worst for over for gold/silver, and a base is being built that should take gold and silver much higher from now to April 2027.

The most important  driver is the Hong Kong Gold Exchange event which will take place in in 1Q 2027. Please read about it at https://ngtiankhean.blogspot.com/2026/11/1st-quarter-2027-seismic-event-for-gold.html. It is really important

• The 'which barrier breaks first chart ' show that the most likely variable to break will be the S&P500, followed by KRE, the index for small regional US banks whose balance sheets are not as resilient as the big banks'. When people can't pay their credit card bills, car loans and mortgages, the small banks are very vulnerable. The S&P500 is most likely to break because of high exposure to AI, semiconductor and data centre stocks. As compared to last week, the probability of nothing breaks within 12 months has now declined from 40% to 33%. Or to put it another way, the probability of something breaking within 12 months is 67%.

• The Real Yields Table. The second signal is the declining rate of change in real yields (nominal interest rate minus real interest rates). When bank deposit interest rate is lower than the rate of inflation, gold/silver become more attractive. For the first time, the rate of change of  5 year TIPS (Treasury Inflation Protected Security) is now negative. In the table above you can see that 5Y TIPS yields have declined from 2.58% on 17 Oct to 2.33%.

The Skew Score.  When our forecasting model predicts a future price range, it gives three key levels: a pessimistic low (Q10), a central median (Q50), and an optimistic high (Q90). The skew score measures whether the upside room and downside room are balanced or lopsided. If the gap between Q90 and Q50 is larger than the gap between Q50 and Q10, the distribution has a fat upside tail — more room to run higher than to fall. That gives a positive skew score, which we read as a bullish lean. The reverse gives a negative score and a bearish lean. You can see that gold is bearish for the short term but strong in the longer term. That's because when other assets e.g. tech stocks crash, investors have to sell gold to top up margin calls from brokers or  to raise cash for their expenses. 

 

The Gold/Silver Ratio (GSR) Candlestick turns Red. Silver has been underperforming gold which makes the GSR very high. When a turnaround for Precious Metals is anticipated, Silver often leads thus bringing down the GSR. So you can now see the first Red Candlestick of the GSR. 

The chart "which barrier breaks first, shows the SP5