Nothing goes straight up or down, and that goes double for volatile markets like the precious metals.
As the US dollar takes a pullback within its intact bounce point…
…Gold is up nicely.
However, before this bounce it had not even corrected to the minimum “healthy” correction level at the SMA 50 (3094 and rising). If it were to clear the 3350 level we’d have to start thinking ‘correction over’ or ‘correction part of a larger topping process’.
I’d prefer to just get the correction over with and start planning for next gold miner earnings season which, if the Gold/Oil and Gold/Commodities ratios so far in Q2 are telling, will be good.
Silver is also positive this morning, but still dwelling below its daily SMA 50. Thus, no positive signal here, especially after failing to make a higher high to the March 28th high.
Indeed, the Silver/Gold ratio remains quite depressed.
GDX is bouncing in pre-market. Currently at 48.54, the short-term downtrend from the high is not broken. As with gold, I’d like to see a minimum low of the 50 day average and potentially any point to a higher low to ‘4’, including a tap of the rising 200 day average.
A lot will depend on the US dollar and the broader market situation. One important note here is that SPX/SPY/ES are down in pre-market. So the counter-cyclical gold miners are still “opposed” to that stuff. In another word, they are “unique”, as we’ve asked all along in order to have a purely positive fundamental view.
I don’t “think” the precious metals correction is over. But if the sector starts taking out upside milestones I’ll readily admit being wrong in that thought and make adjustments.
