Gold and Silver rallied today, but miners underperformed on a relative basis. The relative weakness sustains our outlook for lower prices this Spring.
The dollar should reach a cycle low between now and Monday. Consequently, I’m anticipating the rebound in precious metals to halt once the dollar bottoms. I will monitor for signs of a reversal in both markets.
The stock market moved lower in a C-wave toady, and we could see a bounce later this week. If the bounce is weak, we can expect a decline to the 200-day MA by April or May.
Oil prices closed back below the 200-day MA, and the bounce from $47.09 is likely over. The 10-day EMA should contain prices until May.
-US DOLLAR- I’m expecting the dollar to bottom between now and next Monday. Prices should find support between 99.50 and the 200-day MA (98.33). Metals and Miners should weaken when the dollar bottoms.
-GOLD- Prices are in the resistance box, and I’d like to see a top between now and Monday. Rallying beyond Monday would shift this daily cycle right translated and endanger our interpretation.
-SILVER- Prices haven’t quite reached the resistance box. If our analysis is correct, we should see a top between now and next Monday.
-GDX- Prices moved higher today, but there was little conviction on the buy side. Our analysis is still on track, and this rebound should terminate between now and Monday.
-GDXJ- The Junior Miners demonstrated relative weakness in the face of higher gold prices, unable to strike a new high. We still expect lower prices in May.
-SPY- Stocks broke down sharply today, confirming a C-wave decline. We will probably see some sort of a bounce later this week. If the bounce fails, and prices drop below this week’s low, we will likely see a correction to the 200-day MA by April/May.
-WTIC- Prices closed back below the 200-day MA, and the bounce is likely over. If our analysis is correct, the 10-day EMA should contain any rebound as prices continue lower into May. We should see a decline below the $42.20 low set in November.
The resistance levels are holding, and we should see metals and miners top between now and Monday. Once the top is in, prices should decline into the first or second week of April before reaching the next daily cycle low. The low in April will setup targets for the 6-Month Cycle low, likely to arrive in May.