Today could be an important one for the precious metals. The ‘jobs’ report was as strong as could have been expected, precious metals dropped hard on the knee jerk but have bounced back in pre-market. That reversal might mean something.
I have been looking for the Fed to finally signal that it would begin withdrawing the long term bond buying aspect of QE. This jobs report may have brought that to the forefront. Gold and silver reversed lower and then higher. If the strength keeps up and considering that tax loss selling season should be wrapping up any day or week now, we could have the makings of… I almost hate to say it, a bottom.
The first step remains HUI 206. Gold and silver held above their June lows while the gold stocks dropped below. 206 was the June low and if it is taken back, the sector could be in business.
We have been noting that there will be no technical signals to a bottom since the sector has declined so persistently below support points and moving averages. But there could be ‘event’ signals. I had anticipated a washout to be a signal. But a drop and reversal on ‘jobs’ day near the end of tax loss selling season could be an ‘event’ as well. Let’s see how it plays out.
