Another routine technical update of the precious metals, with all items on track to the bounce projection.
Gold is slithering along the upper bound of the downtrend channel that is actually the Handle to the monthly chart’s bullish Cup. Nope, in the year+ it has taken to build that handle I have not wavered from the big picture bullish view. But man, it takes as long as it takes. Back on the short-term, daily RSI and MACD are not standing in the way of a continued bounce.
The price is kissing the down-sloping SMA 50 this morning with the down-sloping SMA 200 just above. Hence, a downtrend is intact. Should the bounce take out the moving averages the next resistance area is shaded red. Beyond that, if gold takes out the high from the spring above 1920 we are on high alert for a lock and load bullish run. But first things first…
Silver is in a little pattern that says ‘bounce still on’, although the SMA 50 is dive bombing to the resistance area that it is currently dealing with. That average has guided silver down since June. As with HUI (below), I wonder if this time it will not make such a clean failure at the SMA 50. The SMA 200 is at 25.64 and that is significant resistance.
To exit the bear phase and possibly launch a hysterically bullish phase silver also needs to take out the highs of the spring above 29.
HUI has actually done what I had guessed it would do this time and taken out the SMA 50, temporarily at least. But now the caution is that the bugs could start to trumpet this as a big technical achievement, which it is not. There is resistance at the 255 area and the SMA 200 is down-trending at 274.
So as usual, if the macro plays ball we will note it and I will think like a greedy buyer. But if the macro does not play ball I will sell non-core items. Simple. And by macro playing ball I do NOT mean touting of inflation far and wide as the gold community would be likely to do. I mean gold starting to out-perform the cyclical inflatables like stocks, commodities, etc.