It is FOMC week, a time that can be noisy. But we noted it was preferable to enter FOMC with gold muted rather than bulling, and that is what we got. While I’d have preferred gold waited until after FOMC to do this, it is threatening to break consolidation now. Here is the futures view this morning.
It’s a hold of the SMA 50 and now a pop above the EMA 20 and the consolidation line. This is obviously the first thing gold needs to do in order to target a new high and break of what is a small Handle to the massive and bullish Cup we’ve noted on the monthly chart (target: 2790).
Silver is different, more sloppy like many of its miners. However, the red dashed line is the top of the long-term resistance zone from 26 to 27.50. Silver is making a move on that upper level this morning.
GDX closed yesterday on an attempt to break consolidation, but did not quite get it done. As previously noted, this correction/consolidation is thus far much like the May-June correction, and it is just as mature as that one was when it ended.
GDXJ however, broke consolidation yesterday.
The precious metals obediently waited until FOMC week to start hinting that the consolidation was ending. I’d have actually preferred they wait until after FOMC.
But backing out that noise and playing the TA straight, gold and the miners would target new highs if this is not reversed as a bull trap in the next day or two. That would put HUI above the 375 resistance zone and load the next target of 500.
Silver is its own animal, and that animal is a bull as it deals with long-term resistance, much like HUI.