Precious Metals And Miners Are Dropping Into Their 6-Month Cycle Lows

Precious Metals and Miners are dropping into their 6-Month cycle lows. The FED began a rate raising cycle in December 2015. They have raised interest rates three times. Gold prices bottomed on all three occasions (give or take a couple of days).

The Fed watch tool is up to 87.7% today. A rate hike is highly probable on June 14th. If history repeats, we can expect the 6-Month Cycle low to bottom around then.

Unfortunately, markets don’t usually make it that easy. Nearly everyone will be expecting a bottom around the time of the FED announcement. For that reason, I will be looking for the market to throw us a curveball.

We are still stuck between the two paths. Miners look like they want to run higher but gold and silver remain weak. It will take a swing low and a close above the 10-day EMA to convince me prices are bouncing (Path-1). Until that occurs, I’ll continue to favor the slow grind lower (Path-2) scenario.

-US DOLLAR- Prices appear to have bottomed. Yesterday’s bullish engulfing pattern was joined with active follow through today closing above the 10-day EMA and Friday’s high.

-Gold- Still no signs of a bounce. Gold prices require a daily close above $1,229 to form a swing low. I currently favor the slow grind lower (Path-2) scenario. The Path-1 (interim bounce) scenario requires a firm close above the 10-day EMA to become established.

-Silver- Prices are inching closer to the $15.58 support level. It takes a daily close above $16.32 to form a swing low.

-GDX- Prices are trying to rally, but weaker metal prices have held them back. Closing above the 10-day EMA ($21.83) will signal that the rebound is developing.

-GDXJ- A swing low formed yesterday. However, the bounce scenario won’t be approved until prices close above the 10-day EMA ($31.16).

-SPY- Prices are holding at the 239 level, neither breaking out nor breaking down. A close above 240 will tip the scales for the Bulls. Closing below 238 will give the advantage to the Bears.