Tuesday 30 April 2013

Bad month for the metals

Despite a continued bounce, the precious metals still closed April with very significant declines. Gold and Silver fell by 7.5 and 14.5% respectively. With key support taken out, primary trend is indeed still downward, and the rate of decline is accelerating.

GLD, monthly, bearish outlook

SLV, monthly, bearish outlook


April was one hell of a month for the precious metals market. The two day decline - which took out key support, will be remembered for some time, but...it is more likely to be merely the start of a stronger down cycle, than the end of one.

*The ratio of decline/increase between Gold and Silver is..as usual...2:1. For every 1% Gold falls, just double it, and more likely than not, you'll know what Silver is doing.

Strange..and Naive Gold bugs

The weirdest thing about all the chatter out there in the Gold community land this past month is the notion that Aprils decline marks the end of the big down cycle.

That is some twisted thinking, not least when you stare at a monthly chart of gold or silver for more than a few seconds.

The BREAK of support has just happened, and thus it is very likely that prices have not only been confirmed to be weak..but the rate of decline is actually accelerating.

Targets ?

GLD looks set for 120, with SLV <20...perhaps 17s.

As ever, Copper will also be a good confirmation. Right now, Copper is holding the low $3s, but any break of that, and Gold/Silver will likely see further severe drops.

Friday 26 April 2013

Metals manage a minor weekly bounce

After the destruction of the previous two weeks, Gold and Silver managed only moderate gains of 4.1 and 3.2% respectively. Near term trend still looks for a little further upside, but there is severe resistance at the old break/snap levels. Much lower levels are generally expected.

GLD, weekly2, rainbow

SLV, weekly2, rainbow


Considering the recent collapse wave in the Gold and Silver commodity market, this weeks gains have to be recognised as only 'moderate'. This is especially the case for Silver, which has really struggled.

The 'rainbow' (Elder impulse) charts are pretty clear, with Gold showing more strength than Silver. We have a provisional blue turn candle for Gold, but Silver is still red. Certainly, there is nothing 'bullish' about either metal yet.

Underlying MACD (green bar histogram) cycle is still deeply in negative territory, and actually again ticked lower for Silver.

Seeking much deeper lows to come

Regardless of where Gold and Silver get stuck in the coming days..or weeks, with the break of key multi-year support a week ago, I have to believe the precious metals market has more downside to come.

Gold and Silver have both broken a DECADE long rising trend/channel.  The notion that Gold and Silver are going to spend just 1 month under the channel, seems extremely unlikely. More than likely, is that this is literally month'1 of a new cycle that will last 3-6 months, if not even 2-3 years.

Where might Gold and Silver level out? Its difficult to say, but targets remain...

Primary: Gold $1200, Silver 20/19
Secondary Gold 1000, Silver 17//15

There is arguably even a 'doomer' level of Gold @ 900 and Silver in the 12/10 zone. Of course, this would assume a VERY deflationary economic cycle across late 2013 and into 2014. Right now, there are only moderate signs of that - via Copper and Oil.

The next month or two will clarify the situation for the rest of the year.

Thursday 25 April 2013

Precious metals break out of the downtrend

Gold and Silver saw very significant gains of 2.3 and 4.8% respectively today. The gains build upon recent moderate upside, and both metals are now outside of the recent severe downtrend. Near term trend is to the upside, with gaps to fill, and the old support level now resistance.

GLD, daily

SLV, daily


Suffice to say, the trend is UP in the immediate term. The only issue is where do they get stuck..at the gaps..or at the old support levels?


Tuesday 23 April 2013

Precious metals back on the slide

Whilst the main US markets rally for a third day, the precious metals saw some rather significant weakness. Gold and Silver saw closing declines of 0.7 and 2.0% respectively. Silver came within a mere 3 cents of breaking the recent collapse wave low.

GLD, daily

SLV, daily


So, today saw some declines. Certainly nothing too dramatic, but still, it should again send real concern to those who are buying the 'metal dip'.

Underlying MACD cycle for both metals is clearly ticking higher, so the negative momentum is certainly easing, but we're still also very much on the negative cycle.

As stated many times in recent weeks, primary trend remains to the downside. With the break of key support, there is massive downside viable in the months ahead.

One final aspect for the Gold/Silver bulls to consider is the weakness in Copper prices. A break <$3, would be a real problem for the precious metals market.

Friday 19 April 2013

A brutal week for the metals

It was the worse week for the metals since 2011, with Gold and Silver seeing weekly closing declines of 5.9 and 11.4% respectively. There is a very significant chance for near term upside, but with the key support broken, primary trend remains strongly downward.

GLD, weekly

SLV, weekly


Yes, the daily and even weekly charts look extremely oversold, and yes there is the very real likelihood of a near term bounce, but lets be clear...

The PRIMARY trend remains down.

Even more critical to keep in mind is the key issue that with key support broken - with the very natural snap lower, the original down trend has indeed been solidified to a large extent.

I have to now believe that the metals will probably decline for the next few years, and perhaps level out in late 2015/early 2016.

What is bizarre is seeing members of the gold bug community tout this as a buying opportunity, at the very point when the down trend has broken key support..and thus confirming underlying critical weakness.

Despite the fanaticism out there to 'buy before supplies run out', gold and silver look set for much lower levels in the months ahead.

Wednesday 17 April 2013

Metals trying to stabilise

Whilst the main equity and commodity market remain on the slide, the precious metals appear to be trying to stabilise after the recent collapse. However, today's relatively moderate opening gains failed to hold, with Gold closing fractionally higher, but Silver -1%.

GLD, daily

SLV, daily


These are now difficult times for those trading the precious metals. After the critical monthly/weekly support was broken, there is now severe downside still likely in the months ahead.

In the immediate term, the daily charts are suggestive that both Gold and Silver are due some sort of moderate bounce.

Underlying MACD (blue bar histogram) is still ticking lower, but we are clearly on an extreme lower end of what is a historic drop.

One notable aspect is that volume is lessening, and this in itself is probably a sign that the margin call sell side action is coming to an end.

So, near term bounce (probably)..but longer term, the much lower primary targets remain unchanged.

Monday 15 April 2013

Gold and Silver continue to crash

Last Friday saw severe drops for the precious metals, but Monday saw even greater declines. The Gold and Silver ETFs of GLD and SLV collapsed 8.8 and 12.6% respectively. Near term trend shows no sign of a turn, and there is a further 10-15% downside viable in the immediate near term.

GLD, weekly

SLV, weekly


With the latest severe drops, the weekly charts are now looking really different. The recent price action of the past few weeks was indeed minor noise, and now we're seeing some truly horrific price action.

With the loss of key support, we're seeing an absolute classic example, there is simply 'empty air' below.

There are many 'soft' levels of support, but with the current severe - and powerful, velocity on the downside, its going to be really difficult for the Gold and Silver market to stop falling.

The monthly charts - as I recently highlighted, are very clear, GLD 120, with SLV 20..if not even the high teens, seem likely by June/July.

*I suggest any reader to browse back to the posts from last week, all the original targets are unchanged.

Friday 12 April 2013

Gold and Silver collapse through support

Gold and Silver have been in decline since last September, and today's break through key support marks a new phase of weakness. The uncertainty is over, Gold and Silver - along with Copper and (probably) Oil, are set for a major deflationary wave lower.

GLD, monthly1 - bearish outlook

SLV, monthly1 - bearish outlook


It would seem very fair to now suggest that the uncertainty is over. I am taking a very bearish outlook for the precious metals, copper, and Oil into the summer.

The theory/count

I assume everything from the spring 2011 peak down to summer 2012 was a wave'1 down. We saw a 3-4 month little rally into the autumn.

However, the irony is that since QE3 was announced in mid-September, Gold and Silver have continued on what is a very consistent decline.

Today's break through key support ends the uncertainty of whether we were merely tracing out a rather drawn out bull flag. No...we are in a wave'3 to the downside.


GLD 120,  which equates to around Gold $1250
SLV 21/20 - which is Silver $22/21

However, Silver might even fall into the 19-17s...we'll know as the decline continues to progress.

The metal bears will want to see a monthly close at least somewhere around this weeks closing levels.

Wednesday 10 April 2013

Gold slammed back lower

Since the reversal last Thursday, Gold has seen a fair bounce to the upside, but that came to an end with today's closing drop, with GLD -1.7% @ 150.75.  GLD/Gold is now just $25 from taking out the critical low from Dec'2011 of 148.27.

GLD, daily

GLD, weekly2, rainbow


The current action in gold does not bode well for the late spring, and into the summer.

The primary trend remains strongly downward, and each bounce is being sold into.

A secondary minor bounce wave is still possible, but I do NOT see GLD - or SLV for that matter, breaking above declining trend resistance.

I expect the key lows to be taken out...and significant declines to occur into the summer.

Tuesday 9 April 2013

Precious metals continue upward

Gold and Silver continue to rally from last weeks lows. Whether that was a multi-month low is yet to be seen. What remains critical is for them to both break their declining resistance, which for GLD and SLV, lay @ 158 and 29 respectively. Primary trend remains downward.

GLD, daily

SLV, daily


Suffice to say, near term trend is indeed one of a bounce, but until both GLD and SLV break above their fiercely strong declining channel/resistance, they are both still weak.

A failure to break above the resistance will probably lead to yet another severe sell cycle, and take out the lows from summer 2012/11, and right now, that is indeed my best guess.

The next few days will be very interesting to watch.

Friday 5 April 2013

Metals rally into the weekend

With bad jobs data, fears that QE will end diminished, and the precious metals rallied quite strongly. Yet, across the week, Gold and Silver were still lower, and indeed, those earlier falls have caused some serious technical damage, to both the short and mid-term trading cycles.

GLD, weekly

SLV, weekly


It was indeed a rough week for anyone who was long the precious metals.

Gold and Silver declined by 1.1 and 3.8% respectively across the week, certainly, those declines only added to the mid-term declines since the highs from last September.

As things are, there is still absolutely no sign of a turn or levelling phase. Yes, there are possible flooring spikes - especially seen on Gold, but the gains seen on Friday could easily be temporary.

Near term upside targets...

Assuming the near term bounce continues, best case remains....

GLD; 158/160
SLV, 29/30,  31 seems really difficult.

On balance, I would anticipate that when the next bounce fails to break the upper channel on the weekly charts...we'll see the next down cycle take out the summer 2012 lows...at which point there is a great deal of open air on the downside.

SLV first target would be 22/20..if not the 19/17 zone later this summer
GLD, 145/140...with a 3-6 month target of 120.

If those latter downside targets are hit, a lot of the Gold/Silver bug community are going to be more than merely displeased, they are going to be infuriated. 

Tuesday 2 April 2013

Gold and Silver - The horror continues

The buying support that was evident in the previous five trading weeks is now entirely absent from the precious metals market. Both Gold and Silver opened significantly lower at the open, and slid lower across the entire trading day. Near term trend looks extremely weak.

GLD, daily

SLV, daily


Suffice to say, its starting to turn into a horror show.

The weekly charts are now also flipping from neutral, back to a bearish outlook across April/May.

Underlying MACD (blue bar histogram) continues to tick lower, and is set to go negative cycle at the Wednesday open.

There is simply now no longer any hope of a breakout above key declining/channel resistance.

What has become most apparent in the past few trading days...no one is buying the Gold/Silver dip anymore. There simply is no heavy buying as we saw so many times since mid-February.

Monday 1 April 2013

Gold and Silver disparity

Gold started the week with slight gains of 0.14%, but Silver failed to significantly claw back from a sharp gap lower, closing  -1.35%. Near term trend looks moderately bullish for Gold, but Silver now looks extremely weak.

GLD, daily

SLV, daily


Not much to add other than the issue that Gold is holding in what is arguably a bull flag on the daily chart, whilst Silver has failed to hold support (again)..and closed somewhat badly.

Until SLV puts in a few daily closes in the 28s..it remains unquestionably in a very bearish downtrend.