A technical snapshot of the status of the Precious Metals sector.
Gold (daily) is doing normal work in pulling back to test the first level of short-term support after getting a little too much attention on X for its doink above 2500. As yet it is normal. If it were to lose that support and drop to the support area of the up-trending SMA 50, that would be normal too, even if it ruffles some bullish feathers.
Silver (daily) is doing the normal thing and testing the support area that had been the resistance area in the upper 28s, before busting through it. As yet, it remains a bullish move. A failure would indicate that a harder downside test of the pattern (not visible on this chart) and the 26 area could be in order. That too would be normal, if a little upsetting. But the point being for now, silver is testing clear support and is currently above it.
GDX (daily) could and may well think about taking out the most recent gap at 37.50. That would be logical and healthy. It would also keep GDX and HUI in their trend channel breakouts if it goes no lower than that and/or holds the up-trending SMA 50.
It’ll be no surprise if there is a reaction as HUI monthly attempts to make a monthly close in breakout mode.
Just as HUI weekly already made its weekly close in breakout mode, but suffered some reactions after the first time it did so.
All in all for the precious metals, nothing has changed other than some volatility (always in play) has been introduced. Manage as you will. Day traders have probably sold. Hedgers may hedge and profit takers can take profits. But holding the volatility or buying the volatility should work as long as these items remain technically intact. Thus far, they are. If that changes (in my view), you’ll be the first to know.
