Gold consolidated in a tight range between $1213 and $1226 all week. Prices resisted the strong Dollar as it surged Thursday and Friday.

Metals and Miners remain vulnerable going into next week. Silver looks like it may break lower from a small triangle pattern. Junior miners (GDXJ) will likely test its lower boundary.

Gold and the Euro share a strong correlation. The Euro broke down on Friday after a 2-month consolidation. Prices are oversold and are approaching support at the 200-week MA. If prices begin to firm, that could support gold.

The COT report continues to paint a bullish picture. Speculators add to the short side as commercial money covers. The setup is there for a short-covering bonanza – all we need is a spark.

I think we will see increased volatility next week. Gold needs to rally above $1226 and then $1228.50 to generate more upside. A sustained decline below $1212.50 would likely initiate another spike lower.

US DOLLAR WEEKLY

The dollar closed decisively above the 200-week MA as well as the 50% retracement level. I felt the January 2017 top (103.82) was a major 16-year peak, but if prices remain above the 200-week MA, then that hypothesis will need to be revisited.

US DOLLAR DAILY 

Prices rallied and closed sharply above the upper boundary. Progressive closes above 96.25 would establish a breakout and target the 98.00 level. The dollar would have to settle back below the upper boundary to imply a top and false breakout/bull-trap.

EURO DAILY 

The Euro and gold have been strongly correlated. Prices broke down from the consolidation pattern. The Euro needs to find support and reverse to boost gold prices.

EURO WEEKLY 

There is a lot of support on the weekly chart between 112 – 114, including the 200-week MA. If prices are going to bottom and reverse, they should do it here.

GOLD WEEKLY 

It looks like gold is beginning to resist the dollar. The dollar ended the week 1.32% higher and at new multi-month highs. Gold maintained the $1212.50 low and traded between $1213 – $1226 all week.

Commercials dropped their net shorts (futures only) from 47,918 to 25,609 contracts. Their combined (futures/options) holdings fell from 31,738 to 8,235. These are very bullish numbers, but it doesn’t guarantee a bottom.

Speculators have massive shorts. One spark, and we could get a short-covering feeding frenzy.

GOLD DAILY 

Prices more or less consolidated all week between $1213 – $1226. The tight consolidation is storing up energy for a sharp move. Rallying above $1225 – $1226 would indicate a bottom an upward breakout. A decisive close below $1212.50 would propose another breakdown in price.

SILVER WEEKLY 

Technically, prices closed lower for the ninth straight week. A very rare occurrence.

SILVER DAILY 

The pattern looks vulnerable to a breakdown. Closing below $15.18 would support a drop to $14.83. Silver would have to close above $15.50 to signal an upside breakout.

GDX 

Miners made new lows on Friday. I’ll look for support in GDX between $20.00 – $20.25 next week.

GDXJ

I’ve decided to use GDXJ as my guide, prices are very close to the lower boundary. I’ll sell JNUG and USLV if this level fails to produce a low next week. I’d like to see GDXJ maintain closes above $30.20.

JNUG 

I bought my fourth and final tranche of JNUG at $11.32. If prices don’t begin to firm next week, I’ll have to take the loss.

USLV 

Prices are vulnerable to a breakdown next week. If silver slips below $15.18 and towards $14.83, USLV could reach $7.00.

SPY 

Stocks gapped lower on Friday. Prices would have to close below the 20-day EMA to establish a correction.

WTIC

Prices are trying to turn after testing multiple support levels. Closing back above the 10-day EMA could spark another rally. Closing below Friday’s $66.14 low would confirm an intermediate breakdown.