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.