The gold and silver stocks have put in a bullish weekly reversal but Gold and Silver have not confirmed it.
Relative strength in Gold has preceded important bottoms in the Gold price during 2001, 2005 and 2008. That relative strength is starting to show.
Today wasn’t that bad for precious metals but it was a Black Friday given the severe sell-off and the particular day and time of year.
The selloff in precious metals intensified over the past week.
Last week we argued that the underperformance of the gold miners during Gold’s rebound was a bad sign.
It’s safe for the time being but we believe that Gold will ultimately break back below $1200 and below $1100 before the end of the already long in the tooth bear market.
There is more downside ahead and bulls should continue to stand aside before a favorable buying opportunity emerges.
Precious metals miners have successfully digested their sharp gains from early summer. The miners have continued to hold above key retracements as well as 200-day moving averages that are now sloping up.
We need to remember that gold is an anti-conventional type of investment or speculation.
No pain, no gain. That is one comment regarding this seemingly terminal bottoming process in the precious metals complex.
The miners have begun another leg higher because the evidence strongly supports the view that they have formed a higher low. Only time will tell for sure but the evidence is quite strong. It seems that every analyst was calling for a July low.
Barry Ritholtz is out with another article spelling more doom for the precious metals sector and the gold bugs.
Though precious metals are rallying on the day we penn this, we expect more downside before a final bottom or at least before we’ll exit hedges and begin buying. Since the hard reversal in March […]
Precious Metals continue to be in a long bottoming process that began last summer.
Regardless of the cause, the charts for the miners (and Gold) continue to urge caution as lower prices are likely ahead before the next major turn.
The bottoming process for gold and silver shares has been arduous as they’ve oscillated back and forth for almost a year.
Be on alert as the short-term trend for precious metals (especially the miners) could resume to the downside.
Silver has been in a bear market for almost three years and the recent lack of strength suggests the metal could be headed for new lows. New lows are always bearish until the last one. Our technical work suggests that we should watch for a final low and end to the bear market in the coming months.
Unless you’ve been living under a rock then you have witnessed the now false breakout in Gold and gold stocks.
The mainstream is entirely oblivious to the fact that gold stocks (and precious metals) can have rip-roaring bull markets when equities are in a bear market.
At the start of the year we asserted that the mining equities could lead the metals higher. Since then, the shares have roared higher while the metals have remained subdued.
The bottom line is the action in the stocks is very encouraging with respect to a recovery in the entire sector. In fact, most quality producers and juniors bottomed in June and have not made new lows
The worst is over for the mining stocks but we don’t know that to be the case with Gold.
This sector is headed for trouble in the near term but it is likely to be the end of the bear market. There will be a huge and fantastic rebound.
At present Gold looks eerily similar to both Gold in 1976 and the SYP in 2009 prior to their major bottoms.