Metals fall sharply across February

Whilst the equity market pushed to new highs, the precious metals declined for a fifth month. Silver fell 9.5%, whilst Gold declined 5.0%. There is no sign of a turn/floor, and both Gold and Silver look set for further significant declines in March/April


GLD, monthly'1 - bearish outlook

SLV, monthly'1 - bearish outlook

Summary

It has to be said, in retrospect, the declines for the metals really are surprisingly severe. After a few intra-month attempts at a rebound, the metals continue a very steady decline.

Both metals are close to taking out their lows from summer 2012.

On balance, I can not expect last years lows to hold. Significantly lower levels seem likely.

Targets..

SLV 24/23
GLD 140/135

For SLV, a move all the way back to the August 2010 'Bernanke breakout'  - in the high teens now looks feasible..if not 'likely'.

For the Gold/metal bugs, the bearish chart outlooks listed above are nothing less than heresy.

Yet..the trend IS unquestionably lower.

One serious problem the metals are facing - not least as was seen today, is the strength in the US Dollar, which is now testing the USD 82 level. A move to the 88s, or even higher, would put further severe downside pressure onto the metals.

Metals rebounding

The metals snapped lower in the morning - perhaps spooked by the looming Bernanke testimony, but the declines sharply reversed, and both Gold and Silver closed significantly higher. The metals remain in very broad down channels though.


SLV, 60min

SLV, daily

GLD, daily

Summary

Despite today's snap back higher, the precious metals remain in very broad down channels.

SLV needs to break back into the 30s..and GLD needs the 161s.

Those targets are still considerably higher than current levels, and it could be some weeks before we see those broken - if at all.
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What remains key is that the summer 2012 lows really aren't that far below. If that support fails to hold - at ANY time, there will very likely be a massive snap move lower, and one that would likely spell further weeks..if not many months of decline.

Metals fall across the week

It was a rough week for the precious metals market. The near term down trend is continuing, and with the US dollar climbing, the downward pressure intensified. There was a key break below the lower weekly channel/support for both Gold and Silver


GLD, weekly

SLV, weekly

Summary

There is no sign of any levelling/turn yet, in what is now a six month decline from the mid-Sept' 2012 highs.

What should especially concern those looking for a significant bounce this spring/summer, is the key break below the weekly lower channel. This is a major problem, and is even suggestive that perhaps this new wave lower is the start of something more severe.

The summer 2012 lows are indeed critical.

If those fail to hold, with a weekly/monthly close under.. then a FULL retracement to the original 'Bernanke @ Jacksone Hole breakout' from August 2010 look viable.

That would put SLV in the high teens..and GLD back in the 120s...it is a very provocative thought.

Metals break the weekly channel

With the FOMC minutes failing to inspire the main market, early morning weakness in the metals intensified into a very large decline. Gold lost around $39, with Silver collapsing 85 cents. These were the biggest one day declines since the mid December low.


GLD, weekly

SLV, weekly

Summary

Near term trend shows NO sign of turning yet. With the broader equity market only at day'1 of a down cycle, I'd have to expect further weakness into early next week.

Next targets..

GLD 149/47
SLV 26.75
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*I am looking to go long SLV next week, when the SP' floors around 1490/80, with VIX in the 17s.

What will be important to keep in mind next week is the action in the US dollar. If the dollar shows no sign of turning lower..and indeed, if it breaks > USD 81.50, then we could actually be on the verge of something devastating for the commodities markets - and this would include Oil too.

So...as ever..it will be important to keep an open mind.

Another day lower for the metals

Whilst the equity indexes continue to climb to new highs, the precious metals are seeing continued weakness in this latest wave lower. Gold and Silver closed lower by 0.3 and 1.4% respectively. Near term trend still looks weak.


GLD, daily

SLV, daily

Summary

We're getting kinda close to what are probably VERY significant mid-term lows.

SLV needs to hold the 27.50 area, or a serious break of long term trend support will bode for much lower levels, even into the teens.

GLD has a little more room to fall, anything <149 - around $60 lower on Gold itself, would be a real problem for those seeking longer term upside.
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It will be fascinating to see how strong the next up cycle is.

For the big money, the short-stop, and 'chase it higher' levels are crystal clear.
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My mid-term outlook is broadly this...

The above SLV chart applies almost exactly to GLD too.

For Silver bulls, we clearly need a few daily closes above the upper channel, in the 32s.

Metals on the edge of support

Another day lower for Gold and Silver. Gold is very close to taking out the GLD 158 level, which opens the door to a further significant drop. Silver is sitting right on the 200 day MA, and is similarly on the edge.


GLD, daily

SLV, daily

Summary

Near term trend is very weak, and I expect at least a brief break of support.

Primary targets are gained via the weekly/monthly charts (not shown)...

suffice to say, the targets are....

GLD 156/55
SLV 29/28

I would be very surprised if we go much below those levels in the next week or two.
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My broader outlook is for a very significant rally into the early summer, with SLV 38/40, and GLD in the 180/85 area.

The 'chase it higher' levels are very clear, which right now, is $31 for SLV, and $162 for GLD.

Metals on the slide

Whilst the main equity market continues to hold together, the precious metals slipped significantly lower. Gold is now close to taking out the low from mid December, and closed well below the key 200 day MA. Near term trend is most certainly downward.


GLD, daily

SLV, daily

Summary

The metals opened weak, and maintained their declines across the trading day. The weakness was especially noticeable with a dollar that was only a touch higher, and with the main market largely flat.

Near term trends - as suggested  by the weekly charts...

GLD, 157/56...possibly 154/53
SLV 28.50, possibly 27.50.

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With continued intervention from the Fed - especially via the POMO program, I'm still going to guess the metals will see a very significant ramp into the late spring..after this fifth wave lower...which should wash-out the weakest of bullish hands.

Silver snaps to the downside

Both Silver and Gold snapped moderately lower in the morning, yet it was a somewhat turbulent days trading. A morning ramp...but that also failed, and then weakness into the close. The daily cycle is set to turn negative late Friday/early Monday.


SLV'60min

SLV'daily

Summary

Just a brief update..

..it was pleasing to see SLV snap lower at the open, but it sure wasn't easy seeing the ramp take SLV right back to the upper wedge line.

The close was somewhat bearish.

Next soft downside target is SLV 29.75..although we could slip much lower to 28.50 next week.

I remain short SLV, but looking to flip to long within the next 3-7 days..and then hold long into the late spring..with a target of 38/40.

Precious metals ready to break

Gold and Silver look set to break sharply within the next day or two. The price action is approaching the apex of a multi-week wedge/bearish pennant, and a break/snap is very probable. As ever, the key issue is which direction. Best guess is... to the downside.


SLV, 60min

SLV, daily

Summary

*GLD/Gold charts not included today, but they look almost identical.
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I'm guessing SLV breaks to the downside, for a final fifth wave lower -as part of a giant bull flag that stretches back to the highs from last September, before a massive move higher into the late spring to around 38/40.

stop levels - for the serious money, are very clear though.

If however, SLV breaks into the 32s in the next few days, then the downside can be declared over..and the major move higher..will have begun.

Moderate weekly gains for the metals

The precious metals saw moderate gains across the week. Considering the gains in the main equity indexes, and the continued weakness in the US dollar, Gold and Silver are arguably under-performing. It would still seem a fifth wave lower is due in the coming few weeks, before a major wave higher into the early summer.


GLD, weekly2, rainbow

SLV, weekly2, rainbow

Summary

We can see what are clear bull flags - stretching back from the Sept'2012 highs.

A break over the upper channel will confirm the flag, and I'd expect this to occur no later than March.

First though, I'm still seeking a final fifth wave lower - see SLV chart for a rough count of what I'm expecting.


Targets for late spring/early summer 2013

SLV downside to 29, possible 27s..before a major move higher to 38/40
GLD, downside to 157/154..before a major move higher to 180/185