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NFTRH; Post-FOMC Precious Metals Technical Checkup (all according to plan)

Well, it may not feel so wonderful (although if planning to buy, it sure may) but the expected pullback came in the form of the all too logical FOMC ‘sell the news’ event. The gold sector needed a clean out. The gold sector is getting a clean out. Simple.

Here are gold and silver futures this morning. You can click the charts for a full, clearer view. Gold has not even lost the dotted trend line, let alone tested the key 1378 (long-term breakout) area, which now includes the daily SMA 50. Personally, I am staying mentally prepared for that. Both moving averages are sloping up and so that is gold’s trend, up.

gold

Silver made its series of higher lows and higher highs (green arrows) and is taking a much needed pullback, as expected. From NFTRH 562…

At this point the daily chart’s SMA 50 is turning up at a fairly rapid pace and could meet the 2nd line of support by the time silver gets there if silver gets there. It would need to lose support at 16.20 first. For the purposes of preparedness I am going to carry an expectation of a test of the 15.60 area.

The futures show a loss of 16.20 and the next objective at 15.60 (+/-). Notably the SMA 50 is rising toward that area, which also includes the dotted trend line breakout area. Safe to say that the low-mid 15s is very important support congestion for silver. The up turning SMA 200 is also a plus.

silver

From NFTRH 562…

HUI has a couple of hints of its own that it could have further to pull back. Short-term support and a gap are at 195. Another gap is at the 180 support area, which is as important to HUI as 1350-1380 is to gold.

A couple other negative hints HUI daily has going on are an RSI divergence, MACD rolling over from overbought and STO inching below 80.

And so, here comes the first support level at 195. If gold goes on to test 1378 and silver tests 15.60 I don’t see any reason HUI cannot test 180. Alternatively, it would be a nice bull market indicator if Huey shows relative strength to the metals and can hold 190-195.

Personally, I am starting to think like a buyer but I am also prepared for a good old fashioned running of the gold bugs, which (assuming in-line fundamentals) could present a significant buying opportunity at 180 (support & gap fill) to 185 (SMA 50). If we hold 195, so much the better. It would be an opportunity also. Let’s take it day to day and evaluate fully on Sunday after the dust has settled.

hui