Metals And Miners Could Break Out With The Right Trigger

By AG Thorson

Sunday, March 10, 2019 12:16 PM EDT

Overall, I think metals and miners are dropping into their six-month lows, and the recent strength is just a bounce. Nevertheless, we still need to be mindful of a potential breakout if the right economic trigger(s) sends gold suddenly higher. The $1310 – $1320 area will be decisive.

US DOLLAR

Prices are testing the prior high on the prospects of global economic weakness. A clean breakout above 98 would imply a retest of 100 – 105.

GOLD

We usually see one decent rebound in gold as prices sink into a 6-month low. The structure often follows an ABC arrangement. If this is a B-wave rebound, then it shouldn’t exceed the $1310 – $1320 zone before turning back down. A forceful advance above $1320 would support a run to the $1360 resistance area.

SILVER WEEKLY

For the last 2-years silver has consistently topped about 5% above the 200-week MA. A decisive breakout above $17.00 would signal a bullish breakout. Failing to breakout above $17.00 will leave prices range-bound.

SILVER

A bounce in silver should terminate between $15.50 – $15.70. Moving sharply above $15.70 could trigger another test of the 200-week MA (5% above) noted in the weekly chart.

GDX

Miners are bouncing with gold. We had an exhaustion gap sell signal two weeks ago. Prices made a lower low at $21.40, and the current rebound should not exceed the $23.70 high if we are dropping into an intermediate bottom. The next 45-day cycle window arrives March 27th and could time the next low.

GDX EXTENDED

The odds favor a multi-week pullback into the next six-month low, but we still need to be on the lookout for a potential breakout. As described in the February 20th mining update, many charts are near their breakout limits. The right economic trigger could thrust prices above their trendlines, and if that happens, we need to be prepared to go long straightaway.

GOLD

SIL

AEM

SPY

Stocks are trying to find support at the S1 level. If prices are breaking down, then we should see an acceleration lower next week.

WTIC

Oil was down sharply on Friday but recovered into the close. The $54.00 level remains support. The stock market and oil are trading in tandem and should rise or sink together next week.