There are no extremes either way in Gold right now, meaning neither extreme overbought or bullish, or vice versa. We’re in no man’s land following the fake breakout and then the breakdown from the bear flag.
Gold Futures
However, the count says we’re falling in wave C or 3, to $2500-$2400 or $2200-$2100 respectively. A break below $2670 and Gold would accelerate to the downside. Nothing short of breaking the recent high at $2735 would turn bullish in Gold.
CFDs on Gold
The slightly bigger picture also tells us little, but for now, the action is bearish until proven otherwise.
Silver: Key Levels to Watch
The same goes for Silver: no extremes in either direction to rely upon.
Silver Futures
That said, like Gold, Silver had a fake breakout to the upside, which is typically bearish. It broke down soon after, and with gusto. Assuming wave i of C or 3 has completed at $30.12, I am waiting for the peak of wave ii. However we slice it, the picture is bearish, unless we break back above $31.84, the peak in 2/b.
GDX: Miners Outperforming Metals
VanEck Gold Miners
The miners have performed much better than both metals over the past three weeks, but the count still points lower, and an established trend of lower highs and lower lows is in place.
Positioning: Bank Strategies Indicate a Bearish Outlook
The banks used just a 1% appreciation in Gold to add another 5% increase in their net short position. They obviously believe Gold is going lower. And when the Banks start covering their shorts again, the price will fall, as is typically the case.
Same story, different metal. Banks added a “19%” increase in their net short position on a rally of 4% in Silver. This is bearish.
Conclusion: Bearish Momentum Persists
Micro bounces aside, the picture remains bearish.
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