Gold falls for a fifth month

The precious metals of Gold and Silver saw net August declines of -$26.90 (2.2%) to $1206.70, and -$1.12 (7.2%) to $14.44 respectively. Mid term outlook offers further downside, not least if the USD resumes upward to the DXY 100 threshold.


Gold monthly1b

Silver monthly1b

Summary

Suffice to add, it was a pretty dire month for the precious metals. Gold fell for a fifth consecutive month, seeing a low of $1167.10. Next support is the Dec'2016 low of $1124.30. Silver cooled for a third month, settling at $14.44, the lowest monthly close since Jan'2016.

Frankly... the m/t outlook has to be bearish, not least as King dollar remains broadly strong. Legacy gold target of 900/875 looks viable in 2019. Each rate hike will raise the carrying costs for gold, and we should see two rate hikes in Sept' and Dec'.

Clearly, if gold/silver remain weak into 2019, the related mining stocks will be dragged lower. The monthly close for the ETF of GDX is certainly reflective of m/t weakness in gold/silver.

Silver lower for a ninth week

The precious metals of Gold and Silver saw net weekly declines of -$4.20 (0.3%) to $1219.00, and -$0.17 (1.1%) to $15.30 respectively. Near term outlook offers further downside, not least if the USD strengthens toward DXY 100. The m/t outlook has turned very bearish, with Silver <$16s, and Gold having failed to hold the Dec'2017 low.


Gold weekly

Silver, weekly

Summary

A ninth consecutive net weekly decline for silver, the worse run in some years.
Gold settled net lower for the 12th week of 17. Cyclically, both metals are on the low side, and due a multi-week bounce. However, the m/t trend for both is bearish.

To turn provisionally bullish, I would need to see Silver >17.50, and Gold >1400. The latter looks very unlikely before year end.

The fed look set to raise rates Sept'26th and Dec'19th. Each rate hike is inherently bearish, raising the carry costs for Gold and especially Silver.
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Miner implications: This week saw GDX fail to hold core support, and its reflective of m/t weakness in the precious metals.