[edit] Payrolls data are out, they were well below forecast (+245,000 vs. +432,000) and the market is taking it as a big nothingburger. Gold and silver barely moved, the USD stayed down, stocks stayed bullish and so it appears we are firmly on the next stimulus watch.
It is jobs Friday, which may have an effect one way or another on the precious metals along with many other markets. In my opinion an upside surprise could pressure the metals and a disappointment could help the metals. The machines are probably programmed with some kind of ‘if/then’ code. Or not.
While I would like to be cheering us on to new, bullish and golden horizons…
…my job is to play it straight to the technicals. So here goes.
Daily HUI bounced at the ‘best’ target of 280 +/-. It is encountering resistance at a lateral shelf that includes the EMA 20. It has also left a gap just below. It did qualify to end the correction at the 38% Fib and a thus far successful test of the SMA 200, but until the 50 day average is taken out and held (above 317) the other viable target is still open. That is the 50% Fib/pattern top support at 260 +/-.
So lets’ see if HUI can hold the SMA 200 at 291. That would be the first key.
Weekly HUI shows the index thus far holding the support of the 2016 high. That’s not nothing. That is something and again, could have ended the correction. Yet there again is the pattern support at 260 +/-.
The monthly chart reminds us that the situation is a-okay, technically. Monthly RSI is beautifully stair stepping upward, MACD is positive and as these indicators have worked off overbought readings the price has corrected to the top of the projected support zone.
The A-B-C was the original conservative projection for a bear market rally to 375. Over the course of that rally we shifted to ‘new bull market’ mode. But bearing in mind I am not an Elliott Wave chartist, if the bull is to continue as expected we’d be looking for A-B-C to become 1-2-3 with 4 down (in progress) and a big 5 up still to complete.
If the fundamentals start to go the wrong way through inflation, it may still not be an ill-fated A-B-C bear market correction because if the fundamentals erode due to inflation the inflationist gold bugs (which means most gold bugs) are likely to get even more pumped up on gold stocks. The blueprint for this rewarding but very terminal prospect was the 2003-2008 inflation phase in the markets. Big upside into the ‘crown of thorns’ in 2007-2008 and then liquidation.
But for today, things are on plan and that plan is for a normal and healthy correction, which may have ended but is not yet indicated to have ended. If that makes sense.
