Metals close the year on a positive note

Gold and Silver both closed almost 1% higher, although this was somewhat lagging the increases seen in the main equity indexes.


GLD, daily

SLV, daily

Summary

So, 1% gains to close the year, and its been a real mixture of a year for the precious metals - although I'll post more on the bigger picture monthly charts in the next few days.

Underlying momentum is starting to tick back to the upside on both the daily and weekly charts.
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The 2-4 month outlook still looks somewhat bearish, and a break of the summer 2012 lows still seems possible before the next major up cycle.

Gold hits primary target

Despite the main equity indexes seeing further gains, the metals saw significant declines. Gold and Silver fell 1.2 and 3.7% respectively. The near term trend remains downward, but the intra-day bounce is suggestive that a brief floor might be in place.


GLD, daily

SLV, daily

GLD, monthly3

Summary

It has been a long time coming, but GLD broke into the 158s, and seemingly found a little buying interest.

However, lets be clear, the daily, weekly, and monthly momentum is still DOWN. Even if we get a few days of moderately higher closes, it could merely be a bear flag, with much lower levels to come.

Considering the equity market is still >sp'1400 - and my general outlook for low sp'1200s, if I'm right about equities, I can't possibly imagine GLD holding the 150s. A move into the 140s, even 130s seems viable in spring 2013.

Even worse for the metal bulls, if the US dollar starts to rally in early 2013, that will put very significant added downward pressure on both the metals..and equities.

Without question, keep your eyes on how the US dollar trades across the next 2-4 weeks.

Metals show yet more weakness

Whilst the equity indexes break the highs from last weeks FOMC, the metals suffered, with Gold and Silver declining by 1.5 and 1.9% respectively. The immediate term is likely to see further weakness, with Gold likely to fall a further $40.


GLD, daily

SLV, daily

Summary





As expected, the metals were due to show a renewed move lower this week, and we certainly saw that today. Today's declines were in stark opposition to the main equity markets which were significantly higher.

The Gold/Silver bugs will understandably be yet further annoyed by this latest move. Yet there is likely more of this to come.

Primary target remains GLD 158, which is still almost a full $40 lower than current levels. That probably equates to a further $1 to $1.50 fall in Silver.

A week of moderate declines

The precious metals saw moderate declines in the latter part of the week. Gold and Silver closed the week lower by 0.6 and 2.7% respectively. The near term trend is bearish, and it is expected GLD will hit 158 next week, which is a good $60 lower.


GLD, 60min

GLD, weekly2, rainbow

SLV, weekly

Summary

Nothing has changed in the near term outlook. A test of the big GLD 158 level seems very likely, and that remains a significant $60 lower than the closing level this Friday.

GLD 158, probably equates to SLV around $30/29.50, somewhere in that kinda price zone.
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How the metals trade in early 2013 will be significantly dependent upon the currency markets. With some surprising renewed weakness in the Dollar this Friday, it is now increasingly uncertain whether the metals will see a few months of weakness in early 2013.

FOMC fails to inspire Gold

Despite the FOMC confirming 45bn of naked t-bond buying starting in January, Gold failed to hold the gains, and closed just $1.20 higher.


GLD, 60min

GLD, daily

Summary

We have a clear bear flag on the hourly and daily charts.

First target is GLD 158, where I expect a bounce to around 161/62 in Christmas trading week.
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Many out there are also touting 158...

for example, see Chartist friend from Pittsburgh

Whether Gold will slip into the GLD 140s..or even lower in 2013, that remains a very difficult issue to guess.

Metals display a minor failed bounce

Even though both Gold and Silver closed higher, they closed well below their opening levels, and thus closed with black candles on the daily chart. The immediate trend is bearish, and the past four trading days could easily be nothing less than a minor bear flag, which should break lower either tomorrow..or Wednesday.


GLD, daily

SLV, daily

Summary

Near term targets remain GLD 158 and SLV 30/29.50.

If those levels are met, it is likely we'll see a bounce...even if its just a brief one.
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The monthly charts for the metals continue to show moderate weakness.

Metals climb, despite strong dollar

The precious metals saw moderate advances Thursday, but this was especially impressive when you consider the dollar was around 0.6% higher - a pretty significant move in currency terms. The near term trend in the metals remains somewhat to the downside, with targets of GLD 158 and SLV 30.


GLD, daily

SLV, daily

Summary

Suffice to say, the fact the metals held up against the dollar - its second consecutive daily rise, was really impressive.

WTIC Oil - which is similarly highly susceptible to dollar strength, declined by around 2%. In many respects, on a 'normal' day, Gold would have lost around $30 today, with Silver slipping $1.50.

Are underlying currency concerns still keeping the two main precious metals from falling any lower?
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With FOMC next Wednesday - where 45bn of T-bill buying (starting in January) will be confirmed, a further price boost to a broad range of assets seems likely in the latter half of next week.

Metals on the slide

Despite a somewhat weak dollar, the precious metals are seeing some serious weakness again. Gold and Silver look especially weak on the weekly charts, with targets of GLD 158 and SLV 30. If the dollar starts showing some strength in the coming festive period, the metals will be hit hard.


GLD, weekly, rainbow

SLV, weekly

Summary

Despite the hysteria in the gold bug community -where there is still talk of Gold $2000 in early 2013, the precious metals are in real trouble right now.

We have some strong divergence, and its suggesting that the late summer bounce..is likely over.

In the immediate term, GLD looks set for a fall to 158..where a bounce is likely to 160/62.

SLV looks set to for a hit of the big $30, where it would probably bounce back to 32.
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In the long term...precious metals will probably see massive upside, but..as noted..near term looks weak.

Monthly precious metal update

The precious metals remain at an important junction. Either the metals are in multi-month bull flags, or this is a wave'2 bounce - from the original decline that started in summer 2011. The break/snap levels are very clear, and we'll probably know within the next 3-6 weeks, which formation we are dealing with.


GLD, monthly3

SLV, monthly

Summary

There is not too much to note on the metals at this time. The past month saw moderate gains of 3% for Silver, whilst Gold was effectively unchanged.

The deflationists will wish to see GLD test, and break the 158 level. The equivalent level for SLV is the big $30 level.

GLD bulls should be seeking a break above 175. If we can see a monthly close >180 at any point in early 2013, then GLD will probably soar into the mid 200s.

One thing is for sure, we won't be trading in this narrow range for much longer.

Finally, as any monthly chart clearly shows, on a multi-year basis, the precious metals remain in relentless up trends. The only issue still seems to be, the rate at which they increase.

Metals lower..on Dollar strength

Despite the indexes seeing a sharp morning reversal, the precious metals failed to close green, and Gold and Silver saw declines of 1.3 and 0.9% respectively.


GLD, daily

SLV, daily

Summary

The break of channel/trend in gold is quite important, although Silver is surprisingly holding within the channel.

The bigger weekly/monthly charts continue to warn of weakness into next year, unless we break above the Sept/Oct highs.

Metals rallying back

Gold and Silver rallied this week by 2.3 and 5.7% respectively. These gains are in broad alignment with similar moves in the main equity markets. The near term weekly trend remains to the upside, but the metals remain below the important price peaks of early October.


GLD, weekly

SLV, weekly

Summary

Yes, the metals are rallying..the daily and weekly trends are now clearly to the upside. Yet the monthly trends are still weak. We're still a very long way down from $49 silver, and gold in the $1900s. All those touting 'gold to da moon' are still in the realms of crazy talk' land.

What is clear, a break above the early October highs would be very bullish into 2013.

The Gold bugs sure do need a major Christmas gift from the Santa this December. First of all, lets see if Santa turns up at all!

Metals rallying with the broader market

With the main equity indexes rallying 2% today, the precious metals saw some significant gains. However, both Gold and Silver still remain noticeably below their Sept/Oct highs.


GLD, daily

SLV, daily

Summary

The daily charts could possibly be displaying an ABC wave'2 bounce formation. Indeed, the price action from last week is now arguably to be seen as a wave B mini bull flag - as confirmed with today's gap higher.

Weekly and monthly charts remain somewhat mixed. We're still a long way below the 2011 precious metal highs, not least Silver.

Metals showing short term weakness

With the equity indexes showing continued weakness, the commodities - including the precious metals are also starting to display some weakness.


GLD, daily

SLV, daily

Summary

There still seems a reasonable chance that GLD will test the big 158 level, which would equate to Gold @ $1630. It may take some weeks to reach that level though.

Silver - as ever, remains more susceptible to weakness in the broader market, although today, it managed a slightly higher close.

The underlying MACD (blue bar histogram) cycle looks set to level out by tomorrow, and we could then see a very viable 7-10 trading days lower.

Metals breaking against the declining market

Whilst the main equity and commodity markets have been especially weak in the past two trading sessions, both Gold and Silver are actually starting to build some upside momentum. This is quite surprising, and even the bigger weekly trend is now turning back upwards.


GLD, daily

SLV, daily

Summary

The near term trend is now upward, and the weekly is now also starting to support this change in momentum.

The monthly cycle is still suggesting general deflationary pressures though. Only if Gold can get a monthly closing >$1800, would I abandon my multi-month decline outlook.

It will be important for the Gold bugs to see the metals hold onto their gains into the Friday close. That would help clarify matters, at least for a few weeks.

Metals in pre-election ramp

The equity and commodity markets rallied today, but this was especially the case for Gold and Silver, which saw gains of around 2% and 3% respectively. However, the metals remain in a broad down trend, on the daily, weekly, and even the monthly cycles.


GLD, daily

SLV, daily

Summary

Today saw surprisingly strong gains - relative to other asset classes, but despite the gains, the metals remain in very clear down channels, on all three main cycles. Doubtless, a lot of the metal-shorts will have been short-stopped out of their trades. 

Those on the bullish side should be desperate to see some follow through later this week. A failure to maintain today's gains would be extremely bearish, and open up potential for a severe one day fall.

Its been a fair while (March 2012) since we've seen Gold lower by $100 in a day, but I'm highly suspicious of todays little ramp.

I don't expect it to hold. 

Metals set for major declines next week

With the main equity indexes seeing early gains vapourising for the fifth time in six days, both equities and commodities saw a major reversal, and closed lower. Both Gold and Silver saw large declines of around 2% and 4% respectively.


GLD, weekly, 2yr

SLV, weekly, 2yr

Summary

Gold lost around $35 today, with Silver declining by $1.30. These are both the largest daily closing declines in over a month.

Across the week, Gold lost $33, and Silver $1.13. On a weekly basis, these are the largest weekly declines since mid' June. The metals did indeed open the week higher, but merely formed bear flags, and they were confirmed today.


The outlook for next week is VERY bearish.

The weekly MACD (blue bar histogram) cycle is set to go negative at the Monday open for both Gold and Silver. There will be some considerable downside pressure next week, and very likely, across ALL of November.

First target is GLD 161, although SLV has already broken the initial (and very psychological level) of $30. Indeed, it seems highly likely that 161 will not hold for GLD, and thus the next primary target is around 158.

What will be critical for the Gold bugs to see hold is GLD 155. If we see GLD trading <155 for more than a few days, then much lower levels seem likely, at least 140, if not even into the lowly 120s - in spring 2013.


What about the traditional Santa metal rally?

Those Gold bugs seeking the usual seasonal end-year ramp in precious metals, seem set for major disappointment. The monthly charts are similarly confirming a rollover, and the only issue now is whether the June lows will be taken out.

With the global economy weak, the velocity of money continuing to collapse, it still seems that Mr Deflation is out there...lurking in the shadows. Despite the massive issue about the continued QE of the central banks, for now...it seems deflation is still the more powerful force.

Next week will surely see further declines across the week for both Gold and Silver.

Metals end a three month ramp

With October coming to a close, we now have clarification that the multi-month ramp since the May lows has likely concluded. Gold lost $50 across October, with Silver lower by $2.20.


GLD, monthly3, count

SLV, monthly,

Summary

So, Gold lost around $50 on the month (3%), with Silver down $2.21 (6.6%), those declines are 'interesting' but we still closed above the monthly 10MA, which is now the first line of soft support.

For the deflationary doomer bears who expect much lower metal prices, we're going to need to see November close back under the 10MA. Even then, it might merely be a brief move lower, before a further surge higher.

With currency concerns across the western world, the metals remain very tricky commodities to predict.

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*special note on the GLD chart. The 123/ABC count as indicated on the monthly chart should be considered a 'vague' scenario. It would require a very significant deflationary wave into spring 2013 to have any chance of occurring.





A Santa metal rally?

In recent years, the last few months of the year have often been a gloriously bullish time for the metals. Yet, the action in October is suggestive of...trouble.  As ever, it will be fascinating to see how this all pans out.

Metals continue to slide

With equity and commodities sliding, the metals are reflecting this broader downward trend. So far this week, both Gold and Silver continue to slide lower.


GLD, daily

SLV, daily

Summary

There really isn't too much to say. The downward trends are pretty consistent, and we are coming down from what is a very rounded top.

The issue is where will this down move stop? The Gold Bugs are going to get really rattled if GLD breaks <162, and are going to panic if GLD <155.

Any move <155, likely portends for much lower levels in spring 2013. Such an outlook is of course heresy to the Gold Bugs.

These downward moves are truly ironic, considering how QE3 was annouced just over a month ago. With global economic weakness, the metals sure do look weak, and are likely to follow Oil (as is often the case), which is falling even faster in recent days.

Rough week for the Metals

With the broader equity market rolling over in the latter part of the week, the Metals were similarly marked lower. The notion that QE3 will keep pumping asset prices higher...so far, its certainly not being seen.


GLD, weekly, 2yr

SLV, weekly, 2yr

Summary

We have clear rollovers on the weekly charts for both Gold and Silver, and there is no sign that prices are levelling out. In fact, we are due to go negative cycle on the MACD (blue bar histogram0 in about 2-3 weeks, that will be the prime time for a major snap lower.

First target on GLD is 162, and then 158.

SLV, 30, and then 27.

It will be very difficult for the deflationary bears to see Gold break back under $1500, but it is a possibility than even the most permabullish Gold bugs should consider across the next few months.

Metals continuing to weaken

Whilst the equity market saw moderate gains, the Metals were especially weak from the open, and despite a minor intra-day rally, both Gold and Silver closed the daily significantly lower.


GLD, weekly

SLV, weekly

Summary

First target on GLD remains 162. What happens then will be crucial to whether there is still a chance for early 2013 declines, or whether we'll quickly rally to new all time highs

SLV is performing normally, and is roughly sliding twice as much as Gold.

At the current rate of trend, we're set to see the underlying momentum go negative cycle by mid November.

Late autumn metal massacre? It sure would make things interesting, and offer far better 'stacking' opportunities for those who like 'the shiny things'.

Metals close the week...weak !

Both Gold and Silver closed the day lower, and are continuing to present a rollover on the bigger weekly cycle.


GLD, weekly

SLV, weekly

Summary

A pullback is underway, the only issue is how far down do we retrace.

First target for GLD is around 166, and then 162. I believe the latter - also where the 200 day MA lies, will be hit in November. Whether we go below that, is very dependent on the global mood as we move into the Christmas shopping season of December.

The deflationary doomers will be looking for the May low of 148 to be taken out sometime in the next 3-6 months.

With QE3 underway, many are hyper-bullish on the precious metals, but they are clearly rolling over.

Precious Metals losing momentum

With QE3 (without end) announced by the Ben Bernank', the metals have been stuck in a very tight range for over a month. Underlying momentum is still positive, but is clearly weakening. A pullback in prices seems very likely at some point this Autumn.


GLD, weekly

SLV, weekly

Summary

Since the lows in June, the metals have had a pretty good run. No doubt, much of it was all about pricing in QE ahead of the actual announcement. So, is it all priced in, if so..then where now?

A very natural pull to $160 for GLD and $30 for SLV seems very reasonable to expect in the coming 4-6 weeks. That level of decline would not damage the underlying new upward trend

Only with a break below the summer lows of $148 and $25 would it be confirmed that the recent move was merely a 'correction wave'.

Again, for the longer term traders/investors, it really comes down to the ultimate question of which is the more powerful force right now - inflation..or deflation.

I'm still inclined to go with the latter, at least whilst the velocity of money continues to decline, and whilst the banks (and most corporations) hoard their cash.

A narrow trading range for Gold and Silver

The precious metals have now been stuck for around three weeks. If this is just a sideways consolidation, then we should soon see much higher prices in late October and into the post US election period. If however we are simply not able to break any higher, then likely downside is a significant 7-10% or so.


GLD, daily

SLV, daily

Summary

Gold and Silver are trading very similar in style, Gold still seems to be stronger, and that's largely due to it being seen as a safe haven against the depreciating currencies.

From a MACD cycle perspective, we're very low on the cycle, and there is great potential a multi-week move higher - although the weekly cycle would argue against this, whilst the monthly cycle would support it.

With QE3 announced, there is still a feeling of 'ohh, is that it?', especially for the metals and Oil - which is starting to break lower.

What is clear, prices are going to break significantly..and soon. We sure won't be staying in this tight a trading range for much longer. The direction in which we break will probably hold for some weeks, perhaps all the way in early 2013.

A strong quarter for the precious metals

With the third quarter ending, we can most certainly say that the metals had a strong Q3. Gold closed September up $76 (4.7%), with Silver rising $2.69 (8.7%).


GLD, monthly, 2yr

SLV, monthly, 2yr

Summary

Gold is back to the highs of February, although Silver is lagging a little behind. Again, this would arguably because Gold is seen as a better monetary store against depreciating currencies than the more industrial Silver.

*Silver - as usual, rose around twice as much as Gold, so at least the 1.5-2.0x historical ratio of loss/increase remains intact.
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October will be a critical month for both the equity and commodity market. The most interesting aspect of everything right now is that the great uncertainty of 'when will the Bernanke start QE3' is done. That sure does make things a lot simpler.

With QE3 surely priced in, what direction (other than down), could both stocks and commodities go this Autumn? Considering the recent econ-data - most notably GDP and Chicago PMI, both are indicative of a US recession having probably now started.

The Bernanke clearly is going to fight the 'big bad' deflation all the way, yet those deflationary pressures sure are powerful.


Metal break/snap targets for the deflationists

GLD <160
SLV <30

If we can attain those closes at the end of October, then a very viable secondary deflationary wave could indeed be underway - one that would likely last well into summer 2013.

Good wishes