In other words, it’s proving time for the metals. We’ve been following the non-stellar daily charts of gold and silver along with a stellar sector technical indicator (HUI/Gold ratio) and a not yet stellar sentiment indicator (CoT) trying not to impose will but instead, letting the process play out. And play out the daily technicals will shortly, as the futures charts (click for full view) of gold and silver make clear.
Gold is bumping back up against the SMA 50 as a man who stares at charts baffles the gold community with a head spinning ‘it’s going to 1400!… no it’s a H&S headed for 1200!… no wait it’s bullish again!’ (you can’t make this up) mental whipsaw.
Very simply, if it’s an H&S it’s a minor one with a target to the SMA 200 or short-term lateral support. Gold has curled back up to test the underside of its SMA 50. A takeout of 1310 and then the March high could put yeller back in business. Otherwise, don’t personalize it. A test of the SMA 200 would be normal.
Silver has held our original support line (there is more at 14.50) and looks above at the SMA 50, which resisted it on the last bounce.
Regardless of whether the picture resolves bullish or bearish, it does not seem worth making such a big fuss about unless you are some sort of promoter of sensationalism or conspiracy.
There is a lot less risk in silver now than there was in February when the man who stares at charts (and routinely issues alarming bullish and bearish alerts) was wildly bullish on the metals as one of the 3 Amigos with bullhorns. I almost want the metals to drop so that he can successfully complete a trifecta of tragic (and sensational) calls since February. That’s a rare accomplishment, even for a gold analyst.
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