Metals rebounding as USD cools

It was a rather bullish week for the precious metals of Gold and Silver, with net weekly gains of 2.1% and 3.6% respectively. Both metals are close to breaking recent multi-year highs, although this week's strength was unquestionably partly due to the cooling US dollar.


GLD, weekly

SLV, weekly

Summary

Suffice to add... two weeks of cooling were almost fully negated this week, as the metals strongly rebounded.

As ever, a key price determinant is the strength.. or weakness of the US dollar.

The DXY 100 threshold is key, so long as that is not breached, the metals will have opportunity to rise, along with the US equity market.

A second week lower

The precious metals saw a second week of cooling, with Gold and Silver seeing net weekly declines of -0.4% and -2.2% respectively. Near term outlook leans for further weakness, not least as the USD remains broadly strong.


GLD, weekly

SLV, weekly

Summary

Suffice to add, as equities/capital market confidence continue to rise, the precious metals are cooling.

The fact the USD is now in the DXY 97s is only adding to the downward pressure.

Broadly, Gold and Silver are still comfortably holding well above the breakout level from earlier this year.
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Any break <$1200 (GLD 115) would open the door to an eventual 'total capitulation' around $900.

If correct, that would have very bearish implications for the related gold/silver mining stocks.

The bullish run ends

With US/world capital market confidence continuing to improve, the precious metals of Gold and Silver struggled, with net weekly declines of -2.9% and -0.7% respectively. Near term outlook is moderately bearish. With equities breaking 'up and away', the mid term outlook is now extremely uncertain.


GLD, weekly

SLV, weekly

Summary

As I've noted across the past few months, the precious metals have been broadly trading inverse to equities/capital market confidence.

With new historic highs in the sp'500 and Dow, it was not surprising to see the bullish run in gold/silver come to an end.

Of course, one net weekly decline does not negate the bigger bullish breakout. The gold/silver bugs do have plenty of downside buffer zone.

The critical thresholds...

GLD 115.. aka.. Gold $1200
SLV 15, aka... Silver $16.

Any price action below those levels would bode very badly, and open the door to new multi-year lows... to Gold $900 and Silver $10.
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As ever, the USD is a key variable. If the USD breaks >DXY 100 at any point, it would be a massive downward pressure on the metals.

A sixth week of gains

Whilst the broader capital markets gained in confidence, the precious metals continued to build gains. Gold and Silver climbed for a sixth week, with net weekly gains of 1.6% and 2.5% respectively. Near term outlook threatens some cooling, as equities look set to break up and away.


GLD, weekly

SLV, weekly

Summary

Little to add.

Yet another week of gains for gold and silver. This was despite growing confidence in the market that 'everything will be fine into early 2017.. as rates will not likely be raised until at least the Dec' FOMC'.