Gold is cracking below 1920 (currently futures are 1901). Silver is cracking out of consolidation below key resistance and also poking through the daily SMA 50 (currently futures are 22.95). If this holds true we’re likely on the correction that has been coming due.
If the breakdowns hold up we’re looking at support for gold at 1785 (SMA 200) to 1820. Silver’s initial support is the 22 area former key resistance. After that is the SMA 200 at 21.10, which coincides with visual lateral support. The miners will obviously follow suit and we’ll watch to see if HUI/GDX leadership breaks down vs. gold. As of yesterday it was perched on its uptrending SMA 50 in an intermediate uptrend.
ES (S&P 500 futures) is pulling back to test the resistance break we noted in an update yesterday.
The Gold/Silver ratio has taken out the resistance we noted it had reversed upward to in an update yesterday.
Last but not least is Uncle Buck. USD made a false break below support and is now on a rampage.
Bottom Line
I am not going to pretend to have expected such a strong Payrolls report for January. I was actually taken aback by how strong it was. But it is the catalyst this morning for negative moves across the wider US and global asset market spectrum. We have been expecting a counter-trend move in USD and this could be the start of it, with the hawking Fed as its tailwind. We’d expect the Gold/Silver ratio to attend USD upward as it has been positively diverging for more than a month now.
Cash baby.
