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.