Gold has made a test of the lows, as expected after it dropped from the bear flag. The expectation was for a test of the lows or a marginal new low to the channel bottom. It is bouncing and is obviously still in a downtrend.
Silver is also bouncing and has resistance right here at the SMA 200. Take that out and it would undo some damage (and re-take the uptrend). Don’t take it out and it remains vulnerable to significantly lower levels.
HUI continues to hold short-term support within its downtrend. As noted in yesterday’s update: “But the bottom line on gold and gold miners for me at least, is that we may still anticipate a final capitulation although counter-trend rallies can and will happen.”
Until HUI takes out the SMA 200 and the previous high it will not prove to have broken the downtrend and the capitulation scenario would remain alive. Sentiment has been frayed, however, and the darn correction may just expire of its own exhaustion. Let’s see what Huey does at the point where resistance #2 meets the downtrending SMA 50. I am walking a line between trying not to overly bear you up after an 8 month long correction and advising that the trend is still down.