Tough month for Gold and Silver

After significant gains across June and July, August saw some very significant cooling for the precious metals. Gold and Silver saw net monthly declines of -$46.50 (3.4%) @ $1311.40, and -$1.64 (8.1%) @ $18.71 respectively. Mid term rising trend - from the Dec'2015 lows is now extremely vulnerable.


Gold, monthly

Silver, monthly

Summary

August is often a cyclical low for the precious metals.. so its possible we've just seen some natural cooling ahead of a broader ramp into year end and all the way into spring 2017.

The USD is clearly putting some downward pressure on the metals. Whenever the USD is on the rise - mostly due to increased rate hike expectations, the metals almost always get knocked lower.


So, whats my best guess?

Considering the strength in the USD, the metals do look very vulnerable to reversing more of the gains that have been built since the Dec'2015 lows.

Any push into the $1400s for Gold would really turn the outlook powerfully bullish... as the $1500s would then become a given.

Things only turn bearish if Gold trades <$1200.. which is another 8% lower.
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To be clear, I'm leaning bearish, but I have zero interest in trying to short Gold - or the related mining stocks, as long term.. I'm actually hyper-bullish metals/miners. For me.. its the bigger picture that matters.

Metals continuing to slip

The precious metals continued to increasingly lean on the weaker side, with Gold and Silver seeing net weekly declines of -1.5% and -3.4% respectively. The broader trend from the Dec'2015 lows remains intact, and a rather important test of rising support appears due.


GLD, weekly

SLV, weekly

Summary

Suffice to add... short term price pressure is increasingly weak, but the mid term trend remains to the upside.

It is notable both Gold and Silver have seen a bearish MACD cross on the weekly cycle... the first time since the major bullish break in Jan/Feb.

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Implications for the related mining stocks

If the metals do break rising support into the autumn, it will bode badly for related mining stocks.

A mixed week for the metals

Despite the USD continuing to cool, it was a somewhat mixed week for the precious metals, with Gold and Silver seeing net weekly changes of +0.4% and -2.0% respectively. Near term outlook is uncertain, and will be highly dependent on the USD... which itself will be tied to when the Fed next raise rates.


GLD, weekly

SLV, weekly

Summary

Suffice to add... price action remains pretty choppy.

Gold is still maintaining some degree of fear bid, as many are touting far higher levels before year end. Even the mainstream seem resigned to $1500s 'eventually'.

Silver - being the more industrial metal, is clearly leaning far weaker than Gold.. which is to be expected.

Broadly, the metals are holding strong... and things only get bearish if Gold loses the $1200 threshold, which is over 10% lower.

Fractional net weekly changes

The precious metals of Gold and Silver saw a week of relatively moderate swings, with net weekly changes of -0.1% and +0.1% respectively. Near term outlook is leaning bearish, but mid term bullish trend - from the Dec'2015 lows, remains intact.


GLD, weekly

SLV, weekly

Summary

The last six weeks have seen increasingly choppy price action. It could be argued by some of the hyper-bullish gold bugs, that price structure is some kind of big bull flag.

However, on balance, I'm leaning for a test of rising trend in the weeks ahead.

Underlying MACD (blue bar histogram) cycle is ticking lower, and at the current rate, there will be serious threat of significant downside in about 2-3 weeks.

A very bearish weekly turn

It was a bit of a mixed week for the precious metals. Silver broke a new multi-year high, but along with Gold, weakened into the weekend. Across the week, Gold and Silver saw net weekly declines of -1.1% and -3.3% respectively. Near term outlook is bearish.


GLD, weekly

SLV, weekly

Summary

Those weekly candles are very bearish, with the spiky tops.

Gold tried to break a new high.. but failed.

Silverbroke a new multi-year high... but then saw a very powerful reversal.
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The mid term trend since the Dec'2015 lows is still intact, but recent price action is increasingly choppy, and increasingly suggestive of a mid term top.

Bearish if... GLD <124... with SLV <17.