Gold Catches a Break

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Gold finally catches a break!

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Yes today was a great day for the goldbugs, but (don't you hat that word BUT) gold still has work to do to end this downtrend.

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Gold had been running downward along the lower Bollinger bands and posted an outside bar to the upside on Friday kicking off today's move to the upside.

First target is the 18 day moving average currently sitting at $1819.05.

A downtrend is defined as a series of Lower Lows and Lower Highs. Since August of 2020, gold has been doing exactly that a series of Lower Lows and Lower Highs.

In order to negate the current downtrend in gold two things must happen, at least the way I read charts.

First: Gold needs to take out the prior HIGH of $1856.60 posted on February 10, 2020.
Second: any subsequent pull back can not take out Friday's LOW of $1759.

Gold remains under the 18 day moving average which is a negative. The stochastic is finally coming to life which is positive.

The gold mining shares had a power move today.

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On Friday I mentioned that the only thing positive about the mining shares was that they closed at key support. The good news is that the support held and served as a springboard for today's action. GDX vaulted higher and basically touched the 18 day moving average with some life in the stochastics.

In order to change the current downtrend GDX needs to take out the prior high of $35.62 posted on February 11th and any subsequent pull back can not take out last Thursday's low of $32.54. Unless these two event happen the downtrend is intact.

Now to my favorite of the precious metals complex SILVER.

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Silver is once again trading above $28 per ounce.

Below I have posted the weekly chart for silver and the weekly chart for gold.

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Notice the difference in these two charts. Silver has for some time now been posting Higher Highs and Higher LOWS, in an UPTREND while GOLD has been drifting lower in a DOWNTREND.

In an unusual pattern, SILVER clearly is leading the way!

The next few sessions will tell us a great deal about the internal structure of the markets.

Will gold and GDX take out the prior Highs?

Anyway today was a great day to be long the miners and gold. It seems however, that as of late, everyday has been a good day to long silver.

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Peace out and STACK ON!

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