• 509 days Will The ECB Continue To Hike Rates?
  • 510 days Forbes: Aramco Remains Largest Company In The Middle East
  • 511 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 911 days Could Crypto Overtake Traditional Investment?
  • 916 days Americans Still Quitting Jobs At Record Pace
  • 918 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 921 days Is The Dollar Too Strong?
  • 921 days Big Tech Disappoints Investors on Earnings Calls
  • 922 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 924 days China Is Quietly Trying To Distance Itself From Russia
  • 924 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 928 days Crypto Investors Won Big In 2021
  • 928 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 929 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 931 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 932 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 935 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 936 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 936 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 938 days Are NFTs About To Take Over Gaming?
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Gold and Silver Move Closer to Breakdown

Gold and Silver are going to close down for the third consecutive day and the third consecutive week. As we pen this on Friday, Gold bounced from $1162/oz and could close near $1170/oz while Silver traded below $16/oz and may close at $16/oz right on the dot. Both metals are now dangerously close to their final weekly supports and therefore one step closer to an important technical breakdown.

The weekly candle chart for both metals is shown below. Today's action has yet to be updated. Nevertheless, we can see the clear important weekly support for both metals. For Gold it's roughly $1150 and for Silver it's $15.50 to $15.70. The failure of the metals to rally out of their 7-month long bases bodes bearish for the weeks ahead. Furthermore, let's not forget the relatively high net speculative positions seen in both markets. The COTs will be updated by the time you read this but odds are there are plenty of speculators left to drive the metals to a final breakdown.

$GOLD Gold Spot Price (EOD) CME
Larger Image

The miners, which peaked before Gold in 2011 and have shown more strength (or less weakness) in recent months figure to lead the sector out of the coming bottom. At the least, the miners are likely to remain above their lows as the metals break their own lows. In daily terms, Gold is about 2.5% from its low of $1140 while GDX and GDXJ are roughly 13% and 15% from their daily lows. The weekly chart below plots GDXJ and GDX and their weekly support (in blue).

GDXJ Market Vectors Junior Gold Miners NYSE
Larger Image

Put yourself in position so you can take advantage of the coming breakdown, rather than be a victim of it. We booked profits in our hedges today and will look to reload if the metals rebound next week. We also advise tuning out the super bulls and super bears who are calling for price targets which have no fundamental or technical basis. Extreme targets are an emotional distraction and not actionable.

Mind you, we are huge gold bulls and expect a very sharp rebound to come after this final breakdown runs its course. If and when Gold reaches major support around $1000/oz, it will likely find itself extremely oversold with very negative sentiment. That combination along with strong technical support can produce a big rebound. The coming breakdown in the metals could create one last chance to buy quality junior miners at bargain prices.

 


Consider learning more about our premium service including our favorite junior miners which we expect to outperform in the second half of 2015.

 

Back to homepage

Leave a comment

Leave a comment