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Gold, Silver & More: Here Is What To Expect Next

New insights from our Senior Metals Analyst

by Alexandra Lienhard
Updated: May 19, 2017

Tom Denham, the editor of our Metals Pro Service, gives you new insights into the recent price action across the metals markets. He explains why he's bearish on copper -- and updates his forecasts for aluminum, gold, silver and more.


Alexandra Lienhard:  Tom Denham, the editor of Elliott Wave International's Metals Pro Service, is joining me today on ElliottWaveTV. Hi, Tom. Nice to see you. So let's start today by taking a look at copper. You seem to have adjusted your view to being a little more bearish than you were the last time we spoke. Can you explain why that is, and what you're looking for?

Tom Denham:  Yes, I have been looking for copper to turn up from wave c of a triangle pattern. And it got close enough to making a new low and invalidating the triangle pattern that I shifted to a less commonly known pattern, called a double three. A double three can make a new low. And so far, copper has just kind of hesitated right near that low, and it hasn’t moved, but I've got other markets that have been in that same situation. And zinc, also an industrial metal, came down and tagged its low, and basically, invalidated a triangle. And so, when that was happening in zinc, I felt some confidence to make a change in copper, as well.

AL:  And speaking of other markets, are you still expecting that aggressive trajectory to be mirrored in aluminum, or is it still moving to the beat of its own drum?

TD:  Well, you know, aluminum came down and retraced 38.2% of its most recent impulsive wave to the upside. And, for the last several days, it has shown renewed strength. And so I think that what we've seen is a shallow correction, and that broad rally that I've been forecasting in aluminum is continuing on its way.

AL:  And I'm looking at your analysis. You seemed to be suggesting that a very aggressive move in gold will soon take hold. Can you tell me about that?

TD:  Well,in gold, it is looking like it's already gotten a hold of things. The most recent segment of decline that you can see very clearly on a daily chart has been retraced, a Fibonacci 61.8%. And it did it in seven days. The low was seven days ago, and the new high that we've seen at the Fibonacci level was during the European session today. And so, we've seen a very strong impulsive reversal in gold. And, for those of you who understand the Elliott Wave Principle, I think that we're seeing gold begin a third of a third wave. And that can be a very aggressive time in the market. And so, my general orientation is bullish now.

AL:  And Tom, some more to my question about ali. Will silver follow suit, or will it move to the beat of its drum?

TD:  I think it's going to move with gold. Now curiously, silver has been leading gold quite a bit, until recently. Silver was up faster than gold, and then it slowed down, and gold has run past it. We may have, a really, a two-way race here, to see who can move the fastest and the farthest, whether it's gold or silver. Right now, gold is winning. But I wouldn't put it past silver taking the lead again in the near future.

AL:  And Tom, you're referring to the MITT ratio? Yes. Yes. They're always in a balancing act. One's leading, one's following. And that shifts gears every once in a while. And silver had been leading pretty dominantly, and then gold showed more strength here, very recently. But it's not clear that that is set into an established pattern. We may get some wobbling back and forth. But the real meaningful news for trader is both of them are showing strength at the present time.

AL:  Well, Tom, thanks as always, for taking a couple of minutes to chat today. Appreciate it.

TD:  All right. Thank you, Alex.