Precious Metals Grind Lower To June Targets
AG Thorson | May 26, 2016 06:10PM ET
Prices are moving three steps lower and two steps back toward the June targets. I expect this to continue for a few more weeks, and then the final drop to a 6-month low should be relatively sharp finishing this intermediate term decline. I'd like to see a few more trading days, but I'm contemplating lowering the target areas slightly for both gold and silver.
US DOLLAR - Dollar prices are digesting the recent gains, as long as prices don't close below the dashed line and the 10-day moving average for two or more days the trend is higher.
GOLD - Prices attempted to rally, and sellers came in to push them back down into the close: a common occurrence when dropping to a 6-month low. MFI readings should drop below 20 before a bottom arrives.
SILVER - Prices rallied to touch the 10-day MA and promptly soldoff to the opening bid. I may lower the target box slightly to include the $14.60-$14.80 support level.
VanEck Vectors Gold Miners (NYSE:GDX) - Prices touched the 10-day MA but were unable to sustain a close above the $23.34 resistance level, prices should continue lower from here.
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VanEck Vectors Junior Gold Miners (NYSE:GDXJ) - Prices closed right at the blue resistance level and the next area of support comes in at the $29.00 level.
SPDR S&P 500 (NYSE:SPY) - My overall outlook includes fresh all-time highs in US stock markets this year and the potential for a significant top as well. Many of the leading economic indicators I'm watching are hinting of a possible recession starting in 2017. Nevertheless, I think the Fed is helping prices higher before a June rate hike. Volume the last two weeks has been terrible.
Apple Inc (NASDAQ:AAPL) - Apple never broke down (closed) below the critical $90.00 support level, and prices are rallying back to the Island gap around $103 before they turn back lower.
WTIC - Prices appear to be forming an ending diagonal pattern, these often finish with a swift/sharp decline lower upon completion. MFI (above) looks anemic.
The GDP revision will be out at 8:30 AM tomorrow and that could move markets if there is considerable improvement. Have a wonderful weekend!
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