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.