Momentum Wanes in Metals & Miners

Gold Price Analysis: Key Levels to Watch

1-Hour Chart

Gold has been in a range from $2887 to $2974 for weeks now. Consolidation before heading higher again? The RSI is oversold in the short-term and positively divergent. Both MACDs are also turning up.

4-Hour Chart

The momentum indicators have turned down and are approaching extreme oversold levels. The price could fall a little further, perhaps a fake breakdown below $2887? However, the risk-reward profile is starting to turn to the upside again. The fuel is increasing for at least a bounce, perhaps a new higher high.

Daily Chart

The daily RSI and both MACDs tell a different story. They are heading down from extreme overbought levels, which is bearish. But it doesn’t matter until $2887 is taken out.
The sharp downturn in the various momentum indicators does allow for a negatively divergent higher high. A parabolic blow-off top is possible, but it’s a lower probability at this time.

Weekly Chart

The weekly chart is bearish. The RSI is negatively divergent and coming down from extreme overbought levels. The MACDs has have also turned down. Lastly, we have our first weekly red candle in months. Sign of a top? A close below $2887 would signal as much.

Gold Price Outlook: Bullish or Bearish?

There is nothing definitive one way or the other in Gold. We have to wait for a break of $2974 or $2887 to get clarification of the next big move. A drop below $2855 would increase the probability of a bigger drop ahead.

Silver & GDX: Miners' Market Signals

2-Hour Chart

The ABC correction forecast on Feb. 20 has played out perfectly. The question now is whether the correction is complete and we have a 1-2 off the bottom at $31.60. This would suggest a new higher high, OR Silver breaks $31.60 and we have lower to go yet.
Note that the RSI and the MACD Line are trying to turn up.

Daily Chart

By contrast, the daily RSI and both MACDs are still heading south. We have a possible ABC correction with C down next to at least $29.15. But if this correction turns out to be 5 waves down, and wave 3 has begun, Silver could fall to as much as $24 and change. The levels of support can be seen on the right-hand side of the chart in red.

Weekly Chart

The weekly negative divergences called the top in Silver, and the momentum indicators continue to go south. However, until we get a close below $29.15, the upward trend remains intact.

Silver Prices Summary

As long as $31.60 holds as support, Silver can head higher again. Below there, critical support at $29.15 must hold to avoid a change in trend to the downside: a lower high followed by a lower low.

GDX

4-Hour Chart

The miners have broken down out of their channel and the momentum indicators are heading south. $38.24 is support. It is the bottom of the gap left behind on Jan. 29. This would be a 50% retracement.
While this looks increasingly bearish, the correction of the overbought levels in the RSI and the MACD Line provide fuel for the next rally.

Daily Chart

The RSI and both MACDs look even worse on the daily chart and could go much lower. It also sets up a negatively divergent higher high or a blow-off top down the road.

Precious Metals Market Summary: Key Gold and Silver Price Levels

As long as $38 holds, GDX can turn back up to new higher highs. Below $38, and a deeper dive is on in the cards.
All-in-all, there are a lot of crosswinds in metals and miners, but it remains to be seen if the upward trend remains intact and we move back to higher highs, or a bigger correction is under way. Use the levels provided as guideposts in both directions.

Buy gold and buy silver today to secure your financial future. 

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