METALS AND MINING UPDATE

 

If this was a genuine breakout, miners should be soaring today. Their lack of enthusiasm suggests prices are building a divergent top. Gold and Silver are at fresh highs, but Miners are still trading near their 10-day EMA’s.

Gold needs to get through the $1,250-$1,258 zone to extend this rally. Otherwise, we may see an immediate top.

 

-XAU- I think we are seeing is a divergent top. This occurs when gold and silver make new highs, but miners do not. If this is the case, prices should remain below the February high (97.21) and drop significantly in March. I will monitor the structure for a potential shorting opportunity.

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-HUI- The HUI would have to move explosively through the trendline to undo the divergence building between it and gold. A bursting move higher seems unlikely considering this morning’s price action.

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I will continue to monitor the situation, but this appears to be a complex topping process that should lead to lower prices in March.

More in the Thursday report.