In a healthy bull market, the surprises come to the upside. Meaning, pullbacks or consolidations are brief – just a week or two. Gold has been consolidating for about two weeks; it feels like it’s make or break time. To build upon June’s momentum, both metals and miners need to break higher relatively soon.
A potential catalyst to push gold higher is tomorrow’s Fed minutes released at 2 PM. If the language is gold positive, then it could spark the next advance. If it is negative, then gold will probably break down below $1385.
The building blocks are in place for more upside; all we need is a trigger. If prices fail to break higher, then we will be in for more consolidation and a deeper pullback. I’ll try to update after tomorrow’s Fed minutes.
-GOLD- Prices are treading water near $1400 and the 10-day EMA. Key support remains at $1385, closing below it would imply a retest of the breakout area surrounding $1360. The Fed minutes will be released tomorrow at 2 PM and could move prices.
-SILVER- Prices need to close progressively above $15.20 to support a secondary bottom and successful retest of support surrounding $15.00. A daily close below $14.90 would imply a breakdown.
-COPPER- Prices closed below the short-term trendline. A daily close below $2.59 would establish a secondary breakdown.
-GDX- Miners are trying to hold the 10-day EMA. If this is a bull flag, then we should see prices break higher relatively quickly. Tomorrow’s Fed minutes could be a trigger if viewed as gold positive.
-GDXJ- Juniors need to produce substantial upside follow-through relatively quickly if they are to maintain the momentum thrust that began in June.
-USLV- Prices need to maintain Friday’s $60.20 low to prevent a more profound breakdown. It would take daily closes above $64.00 and then $66.00 to restore the May advance.
-SPY- This appears to be another brief 3 to 5-day consolidation before the next rally. I suspect we will see the 300 level tested in the coming days.
-WTIC- Oil needs progressive closes above $60.00 to support a short-term breakout. Support resides between $54.00 – $55.00.
Have a great night.