E Metals Market Report - Thursday

Today’s rally/breakout in gold was stopped in its tracks when the ECB announced an end to their QE program. I think the negative influence will be short-lived if gold remains above $1293.

Declining and closing below $1293 would challenge my near-term bullish forecast and I’d consider scaling out of some or all of my JNUG and USLV positions.

Silver broke above the breakout trendline, but I’d like to see I little more follow-through to reduce the potential for another false breakout.

The HUI, XAU, and HUI:GLD ratio all closed above their short-term breakout levels.

Upside follow-through tomorrow would be incredibly positive and support a new advance. Closing significantly lower tomorrow would keep us in limbo until a trend emerges.

-US DOLLAR- Prices were breaking down from the bear flag but reversed immediately higher after the ECB announcement.

-EURO- The Euro broke sharply lower after they announced an end to their QE program.

-GOLD- Despite the sharply higher dollar gold ended modestly higher. To build upward momentum gold needs to close above $1,311.50. A daily close below $1,293 would make me rethink my cycle count and near-term bullish outlook.

-SILVER- Silver pulled back after reaching $17.35 but ended well above the trendline. Volume is rising, and that supports a potential breakout. To confirm a breakout, I’d like to see silver close higher again tomorrow.

-HUI:GLD RATIO- The HUI/GLD ratio closed above the triangle but to establish a breakout, I’d like to see a close above 1.490.

-GDX- Miners ended higher they need to rally above the upper boundary to generate an upward breakout.

-HUI- The HUI closed above its upper boundary.

-GDXJ- Juniors need to rally and close above $33.51 to spark an upward advance.

-XAU- The XAU made a new closing high and finished above the short-term trendline.

-JNUG- Prices finished slightly higher. We need a close above the $14.92 swing high to encourage a meaningful rally.

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