A choppy week to start the year

Despite the indexes seeing a near hyper-ramp to begin the year, the metals failed to participate, and closed the week largely flat. The weekly momentum is still negative, and with the monthly charts similarly still pushing lower, the general pressure remains somewhat to the downside.


GLD, weekly

SLV, weekly

Summary

The week closed with something of a recovery for the metals. With an early Friday drop of $32, Gold managed to close the day down just $7.60, and Silver actually managed to close a touch higher.

The near term trend is still somewhat to the downside, and this is especially the case since the big monthly trend is also pushing down.

The big unknown is whether the summer 2012 lows will be tested..and/or broken.

As was again displayed today, the metals will greatly react to how the US dollar trades. Were we to see a renewed continuation of the dollar - post spring 2011 rally, then the metals will likely break below the summer lows.

Primary target would then be GLD 140/130, with SLV 22/20 The latter of course would assume a particularly weak/deflationary economic outlook, despite an annual 1trn paper printing policy by the Federal Reserve.