Metals Market Report - Thursday
Today’s rally/breakout in gold was stopped in its tracks when the ECB announced an end to their QE program. I think the negative influence will be short-lived if gold remains above $1293.
Declining and closing below $1293 would challenge my near-term bullish forecast and I’d consider scaling out of some or all of my JNUG and USLV positions.
Silver broke above the breakout trendline, but I’d like to see I little more follow-through to reduce the potential for another false breakout.
The HUI, XAU, and HUI:GLD ratio all closed above their short-term breakout levels.
Upside follow-through tomorrow would be incredibly positive and support a new advance. Closing significantly lower tomorrow would keep us in limbo until a trend emerges.
-US DOLLAR- Prices were breaking down from the bear flag but reversed immediately higher after the ECB announcement.
-EURO- The Euro broke sharply lower after they announced an end to their QE program.
-GOLD- Despite the sharply higher dollar gold ended modestly higher. To build upward momentum gold needs to close above $1,311.50. A daily close below $1,293 would make me rethink my cycle count and near-term bullish outlook.
-SILVER- Silver pulled back after reaching $17.35 but ended well above the trendline. Volume is rising, and that supports a potential breakout. To confirm a breakout, I’d like to see silver close higher again tomorrow.
-HUI:GLD RATIO- The HUI/GLD ratio closed above the triangle but to establish a breakout, I’d like to see a close above 1.490.
-GDX- Miners ended higher they need to rally above the upper boundary to generate an upward breakout.
-HUI- The HUI closed above its upper boundary.
-GDXJ- Juniors need to rally and close above $33.51 to spark an upward advance.
-XAU- The XAU made a new closing high and finished above the short-term trendline.
-JNUG- Prices finished slightly higher. We need a close above the $14.92 swing high to encourage a meaningful rally.
-USLV- To maintain a breakout prices need to continue above the trendline. Closing back below $11.00 would be negative and potentially signal a short-term top.
-WTIC- Prices closed progressively above the 10-day EMA and are testing the 50-day EMA. The rebound has been comparatively weak, and another breakdown remains possible if oil fails to recapture the 20-day EMA next week.
I’ll update members sometime tomorrow.
Disclosure: None.