The preferred support for gold is 1350. This morning gold is $10 an ounce below that level.
Gold is above the 50 day SMA (1330, yellow shaded below), so that could provide support, but for the sake of preparedness, let’s continue to think about 1300 as the next support level. Also, another support is noted at around 1260.
HUI went below the 50 day SMA (245) on Tuesday and silver has support all the way down to 20, as we have noted previously. What started out as a routine correction from over bought, over loved status is definitely sinking its teeth in now.
Gold got all mixed up in the Syria hype and the positive in this correction is that the Gold Bugs sentiment from Sentimtrader that had been reading a troubling 80, 90 and 100% as we noted several times is sure to get fixed by this.
Yesterday I had to slap my hand away from the keyboard to keep from buying and to keep from writing an update about the precious metals. What could have been interpreted as a positive bottoming grind was happening with little volume and/or volatility. In other words, it felt phony and I felt an update would not be in our best interests. In short, nothing has changed.
My plan is to continue to survey the macro backdrop to be sure that a ‘buy the correction’ stance is appropriate (yield curves have shown a slight inclination toward rising this week — a slight positive) but the Fed is on tap shortly along with more associated ‘Taper’ hype. Then there is always the twin Kabuki dance of the Debt Ceiling and Syria dramas.
The result will probably be volatility in the precious metals and potentially broad markets. Patience is a key here; a ‘remain intact first, ready to speculate second’ type of thing. We’ll update events as applicable every step of the way in NFTRH and in updates.