Friday 26 April 2013

Metals manage a minor weekly bounce

After the destruction of the previous two weeks, Gold and Silver managed only moderate gains of 4.1 and 3.2% respectively. Near term trend still looks for a little further upside, but there is severe resistance at the old break/snap levels. Much lower levels are generally expected.


GLD, weekly2, rainbow



SLV, weekly2, rainbow


Summary

Considering the recent collapse wave in the Gold and Silver commodity market, this weeks gains have to be recognised as only 'moderate'. This is especially the case for Silver, which has really struggled.

The 'rainbow' (Elder impulse) charts are pretty clear, with Gold showing more strength than Silver. We have a provisional blue turn candle for Gold, but Silver is still red. Certainly, there is nothing 'bullish' about either metal yet.

Underlying MACD (green bar histogram) cycle is still deeply in negative territory, and actually again ticked lower for Silver.


Seeking much deeper lows to come

Regardless of where Gold and Silver get stuck in the coming days..or weeks, with the break of key multi-year support a week ago, I have to believe the precious metals market has more downside to come.

Gold and Silver have both broken a DECADE long rising trend/channel.  The notion that Gold and Silver are going to spend just 1 month under the channel, seems extremely unlikely. More than likely, is that this is literally month'1 of a new cycle that will last 3-6 months, if not even 2-3 years.

Where might Gold and Silver level out? Its difficult to say, but targets remain...

Primary: Gold $1200, Silver 20/19
Secondary Gold 1000, Silver 17//15

There is arguably even a 'doomer' level of Gold @ 900 and Silver in the 12/10 zone. Of course, this would assume a VERY deflationary economic cycle across late 2013 and into 2014. Right now, there are only moderate signs of that - via Copper and Oil.

The next month or two will clarify the situation for the rest of the year.