• 312 days Will The ECB Continue To Hike Rates?
  • 312 days Forbes: Aramco Remains Largest Company In The Middle East
  • 314 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 714 days Could Crypto Overtake Traditional Investment?
  • 718 days Americans Still Quitting Jobs At Record Pace
  • 720 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 723 days Is The Dollar Too Strong?
  • 724 days Big Tech Disappoints Investors on Earnings Calls
  • 725 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 726 days China Is Quietly Trying To Distance Itself From Russia
  • 727 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 731 days Crypto Investors Won Big In 2021
  • 731 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 732 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 734 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 734 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 738 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 738 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 738 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 741 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Monthly Charts Argue for Lower Prices in Precious Metals Complex

The trading month doesn't always end on a Friday but when it does we like to take a look at the monthly charts. Generally, I prefer daily and weekly charts because they have more data points. However, monthly charts carry more significance than weekly charts which carry more significance than daily charts. You get the point. One reason and a good reason we expect the current correction to continue is the sector monthly charts.

The chart below plots the monthly candle charts of GDX and GDXJ. Earlier this year the miners exploded above their 20-month moving averages and into a new bull market. They were trading at three year highs before a bearish reversal in August that reversed the entire gains from July. September saw a recovery but failure to hold most of those gains. This tells us that selling pressure remains present and miners will likely see lower prices in October.

Market Vectors Gold Miners and Junior Gold Miners Monthly Chart

The metals show a similar picture. Markets moved well above their 20-month moving averages but the August candle engulfed July's candle while September recovered only to a small degree. That implies lower prices in October. Gold has support around $1290 while Silver has support near $18. Like the miners, the metals remain a healthy distance above their rising long-term moving averages.

Gold and Silver Monthly Charts

The monthly charts and in particular the action of the past two months leads us to believe lower prices in October are more likely than not. The monthly charts obviously take more time to develop (we have to wait an entire month) but they are the most significant. Time will tell but we see the potential for an important low in October. Traders and investors are advised to wait for lower prices and an oversold condition. We will focus on opportunities scattered amongst individual companies.

 


For professional guidance in riding the uptrend in Gold, consider learning more about our premium service including our favorite junior miners which we expect to outperform into 2017.

 

Back to homepage

Leave a comment

Leave a comment