NFTRH; Precious Metals Update

A brief technical look at the precious metals sector using daily charts…

GDX remains in a series of higher highs and higher lows, consolidating in a flag down toward the 50 day averages.  There is some negative divergence in the MACD and RSI.


GDXJ is similar, though not really flagging as it consolidates.  Higher highs, higher lows and at or above all key short-term averages.


SIL is much like GDXJ, consolidating above all short-term moving averages.


GLD made a key higher high before getting reversed sharply.  Anecdotally, this scared a lot of gold aficionados and that, at face value, is not a bad thing.  There is analysis out there calling this a big broadening top in gold, and of course Clive Maund is perpetually bearish, but while I’d have caution about the Brexit hype, this is simply a sideways consolidation and not a problem yet with gold above the 50 day averages.

I did find the linked article interesting however, in that it projects a breakdown target at 105, which is equivalent to the 18% drop we discussed in NFTRH 399’s opening segment based on my own initial buying experience in 2003.  The point was that an equivalent drop today would be to around the lows, which this broadening top scenario measures to.


SLV may have made a short-term double top (and lower high) and some are noting the negative divergence this represents to gold.  Indeed, the high volume reversal is a bearish indicator.  But SLV is above all key moving averages and until something breaks down, it is not broken down (said Captain Obvious).


Again, until silver weekly loses the EMA 55 (16 on silver), this thing is intact.


Finally, the Silver-Gold ratio continues to look constructive after making a consolidation down to the 50 day averages.  MACD especially, looks intriguing.  If the SGR breaks upward, it may not pay to be bearish much of anything, including precious metals.


Of course it is T-minus less than a day on the Brexit/Bremain announcement so everything can be taken with the grain of salt of this unpredictable outcome.  But I wanted to get you a mid-week technical look at the PM sector none the less.