A lot to discuss about the macro market and its signals, but I’ll save it for the weekend. Right now let’s zoom in on gold and silver, and reaffirm what the best buying opportunity would look like in the metals and the miners. That opportunity would include a macro with a failing inflation bid, which is not yet confirmed, although Gold/Silver ratio and USD continue to rally. But technically…
Gold failed the break above the moving averages after being halted right at the thick red resistance zone we had noted previously. No 1920+, no new bull leg. It’s as simple as that. It’s at a significant support level right now but if that fails 1680 is up next. At an extreme, which is not necessarily expected, gold has potential downside to the mid-1500s while still remaining in the Handle to a monthly chart’s bullish Cup. Where ever gold bottoms on this handle should be a big buying opportunity.
But first, let’s see how it does at current support. It’s done a massive amount of good work since fear blew out over a year ago, setting gold on its corrective journey.
Silver failed right at the SMA 50, much as the HUI Gold Bugs index did. It is now looking at the bull market breakout point of 21.23, which we’ve long expected to be hit. Better support is at 18.90. That could be a serious buy if registered.
Let’s expand the chart to show all those touch points at 18.90. The support at 21.23 is longer-term and cannot be viewed on these daily charts.
If the metals hold this bearish stance (it’s futures, after all) we will load 1680 for gold and 18.90 for silver as preferred downside targets.
As for the HUI Gold Bugs index and its lame bounce, the targets have not changed. 230, 212, 185 and anywhere above the 2020 crash low of 145 at an extreme.
This market has been one for the ages where contradictory signals are concerned. That has especially been so in trying to kill the up trending bull items like stocks and commodities. But the precious metals have a built in guide and that guide is a downtrend in force for over a year. So any move in the direction of the trend should be taken seriously. If gold stocks are tanking while their macro fundamentals improve by leaps and bounds (with the rest of the macro tanking, e.g. Q4 2008) we’d have an epic buy. But for now let’s just stay mechanical about it and track each phase as it unfolds.