Metals fall across the week

It was a rough week for the precious metals market. The near term down trend is continuing, and with the US dollar climbing, the downward pressure intensified. There was a key break below the lower weekly channel/support for both Gold and Silver


GLD, weekly

SLV, weekly

Summary

There is no sign of any levelling/turn yet, in what is now a six month decline from the mid-Sept' 2012 highs.

What should especially concern those looking for a significant bounce this spring/summer, is the key break below the weekly lower channel. This is a major problem, and is even suggestive that perhaps this new wave lower is the start of something more severe.

The summer 2012 lows are indeed critical.

If those fail to hold, with a weekly/monthly close under.. then a FULL retracement to the original 'Bernanke @ Jacksone Hole breakout' from August 2010 look viable.

That would put SLV in the high teens..and GLD back in the 120s...it is a very provocative thought.

Metals break the weekly channel

With the FOMC minutes failing to inspire the main market, early morning weakness in the metals intensified into a very large decline. Gold lost around $39, with Silver collapsing 85 cents. These were the biggest one day declines since the mid December low.


GLD, weekly

SLV, weekly

Summary

Near term trend shows NO sign of turning yet. With the broader equity market only at day'1 of a down cycle, I'd have to expect further weakness into early next week.

Next targets..

GLD 149/47
SLV 26.75
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*I am looking to go long SLV next week, when the SP' floors around 1490/80, with VIX in the 17s.

What will be important to keep in mind next week is the action in the US dollar. If the dollar shows no sign of turning lower..and indeed, if it breaks > USD 81.50, then we could actually be on the verge of something devastating for the commodities markets - and this would include Oil too.

So...as ever..it will be important to keep an open mind.

Another day lower for the metals

Whilst the equity indexes continue to climb to new highs, the precious metals are seeing continued weakness in this latest wave lower. Gold and Silver closed lower by 0.3 and 1.4% respectively. Near term trend still looks weak.


GLD, daily

SLV, daily

Summary

We're getting kinda close to what are probably VERY significant mid-term lows.

SLV needs to hold the 27.50 area, or a serious break of long term trend support will bode for much lower levels, even into the teens.

GLD has a little more room to fall, anything <149 - around $60 lower on Gold itself, would be a real problem for those seeking longer term upside.
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It will be fascinating to see how strong the next up cycle is.

For the big money, the short-stop, and 'chase it higher' levels are crystal clear.
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My mid-term outlook is broadly this...

The above SLV chart applies almost exactly to GLD too.

For Silver bulls, we clearly need a few daily closes above the upper channel, in the 32s.