Gold, Silver & Gold Stocks Heading Higher
Here is the Gold Miners index achieving that initial objective. I don't know how long it will take to consolidate here and move on, but I do think the much higher probability is an upside resolution:
Moving forward, we only want to be long $GDX if it's above 45. Below that and I think it's more trouble than it's worth. The next target is back up towards those former all-time highs near 65. Gold got there already. I think the miners do too.
Here is the Gold ETF $GLD getting back to those former highs and struggling up there. Makes perfect sense to me. It's a big reason why we locked in that credit in the options market:
Like Gold Miners, I do think after some further consolidation the path of least resistance is higher. If we're above those 2011 highs, I like this long with a target near 238. Let's call the risk level 186.
And finally, here's Gold's crazy little cousin Silver. In this case, Silver also achieved our upside objective based on all that former support in 2011 & 2012. To be more on the safe side, let's call the risk level closer to 27.
If we're above that, then I like $SLV long. Otherwise, it's a no-touch for now. $34-35 looks like a good target based on both a key retracement and former support in 2011-2012.
The big catalyst here? I think the obvious choice seems to be a weaker US Dollar. It's certainly helped so far. This is a downtrend:
Bruni has more on this in our new Chart of The Week
If you start to see the $DXY above 94, then it's probably going to take much longer for these precious metals charts above to break out again. New lows in $DXY and further deterioration towards those 2018 lows will most likely lead to that next leg higher in metals.
We'll be watching closely.
JC