Big bear flag

The precious metals of Gold and Silver saw a second consecutive week of gains, settling higher by 0.6% and 1.3% respectively. However, price structure remains a very clear bear flag, and renewed downside is highly probable.


GLD, weekly

SLV, weekly

Summary

Suffice to add... a second week of gains, but price structure for both metals sure are very clear bear flags. Price action could remain a little choppy - leaning higher, for another week or two, but broadly, the precious metals look extremely vulnerable to another big wave lower.

The USD is a clear downward pressure, and any move above the giant psy' level of DXY 100 would be massively bearish.

Further, higher rates would be arguably bearish for the metals. The Fed still look on course to raise rates at the FOMC of Dec'14th.


Implications for miners

If the bear flags for Gold and Silver do play out, then the related mining stocks are going to get trashed, at least on the order of 15/20%.

On balance... that does seem probable.

Still weakly rebounding

The precious metals are still vainly trying to rebound, after the severe drop from a fortnight ago. Gold and Silver saw net weekly gains of 1.2% and 0.5% respectively. Near/mid term outlook remains bearish.


GLD, weekly

SLV, weekly

Summary

First, I will note that considering the continuing strength in the USD, the metals had an even better than on first look.

On balance, further weakness seems probable, with rather clear downside gap zones for both metals.

A very weak bounce

After last week's very powerful downside, a bounce was due, and there was indeed one this past week. Yet, it was very weak indeed, with Gold and Silver seeing net weekly declines of -0.3% and -0.2% respectively. Mid term outlook is bearish as there is a crystal clear break of rising trend that began at the Dec'2015 lows.


GLD, weekly

SLV, weekly

Summary

Frankly, the bounce is barely noticeable, and it does bode very bearish for Gold/Silver into month end.

Next support for GLD is around 116/113, with an equally tempting gap zone around 113/112. Any price action <112 would bode for a return to the Dec'2015 low.

SLV support is not until $15, which is another 10% lower.

It is notable that the MACD (blue bar histogram) is at/below the Dec' 2015 lows. For Gold, its the most bearish technical situation since summer 2013.
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A note on the USD, weekly

The USD saw a second consecutive significant net weekly gain. The strengthening dollar is clearly a major downward pressure on the precious metals. Any move above the giant DXY 100 threshold would cause absolute carnage for the metals - and related miners.

Powerful net weekly declines

It was the most bearish week for the precious metals since Sept'2013, with Gold and Silver seeing net weekly declines of -4.7% and -8.8% respectively. Near term threatens a bounce, but mid term outlook is now bearish, as rising trend from the Dec'2015 lows has been decisively broken.


GLD, weekly

SLV, weekly

Summary

Gold and Silver have both now decisively broken the rising trend from the Dec'2015 lows. It can be counted as 'week 1' down.. from the break.

Next week could easily see a net weekly gain, but it will do nothing to negate what is a massively significant break.

In theory... GLD will cool to at least the 115s.. which would equate to Gold losing another $30/40. SLV looks vulnerable to the $15s... equating to Silver $16s.
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*price structure in a number of mining stocks is offering a VERY big bull flag. In theory, that would suggest this past week's declines in Gold/Silver won't lead to breaking the Dec'2015 lows.

On balance.. its a VERY borderline situation.

As ever, the USD will be a key variable... any move above DXY 100 would bode for Gold <$1000, with Silver $10.

Metals smashed lower

It was a brutally bearish day for the precious metals, as talk of an early end to ECB QE, gave the excuse for a weaker Euro and stronger USD. Gold and Silver saw severe net daily declines of -3.3% and -5.0% respectively. Gold has seen a particularly decisive break of rising trend that stretches back to the Dec'2015 low. Outlook... bearish.


GLD, weekly

SLV, weekly

Summary

Seen on the bigger weekly charts, its somewhat of a more mixed picture. Gold has decisively broken rising trend, whilst Silver still has a little further downside buffer.
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The situation is that the mining stocks were an early warning that the metals were in trouble. The ETF of GDX saw a giant bearish engulfing candle in August.

Now we have a very clear break of rising trend in Gold... with the miners continuing to spiral lower.

Gold is only just beginning a down wave that (in theory) should last at least two full months... taking us into early Dec'... just before the Fed appear set to raise rates.

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An old target of Gold $900/875 is not on the menu yet, but if GLD can't hold $115.. aka... Gold $1220 (or so)... it'll bode for a brutal 2017 for the gold bugs.