The weekly flagship Gold & Silver Trading Alerts would normally be posted on Monday, but I’m not able to do so today, as I’ve had a very high fever for the entire weekend, and things are only getting back to normal today. So, I will provide you with a quick update on key short-term points today while postponing the publication of the flagship analysis. Besides, since the outlook didn’t change, last week’s flagship analysis remains up-to-date: https://www.sunshineprofits.com/gold-silver/gold-trading/heres-whats-eating-away-at-gold/
Gold moved higher in today’s (Feb. 22) pre-market trading, but this move doesn’t change anything so far. It will be interesting to see where gold closes today’s session. If it closes above the Feb. 4 close of $1,792.20 (which was the early Feb. bottom), it might correct (rally) a bit more before declining in a more profound manner. However, if gold closes at or below $,1792.20, it will be likely to decline further right away.
Silver’s sideways movement has been continuing for about two weeks now, with today’s performance of the white metal being in line with this pattern. This doesn’t provide us with any additional information.
The key action is taking place in mining stocks. In Friday’s (Feb. 19) second intraday Alert, I wrote the following:
Based on today’s weakness in the mining stocks relative to gold and the fact that they (both: GDX and GDXJ) are almost certainly going to close the week below the neck levels of their respective head-and-shoulders patterns, the outlook became even more bearish than it was before.
That’s exactly what happened. They both closed below the neck levels of their respective head-and-shoulders patterns, and the breakdowns were confirmed. This is very bearish. At this point you might be wondering if today’s pre-market move higher in gold won’t trigger a rally in the miners that would invalidate the breakdown?
Even if that happened, it would be likely that miners slide after another attempt. Still, so far, it seems that the breakdowns will hold. On the London Trade Exchange, the GDX is trading below its Thursday’s intraday high, and it would have to rally up much more to invalidate the breakdown below the neck level of the head and shoulders pattern.
Consequently, the outlook for the precious metals market remains bearish for the following weeks / months.
As always, we’ll keep you - our subscribers - informed.
To summarize:
Short-term outlook for the precious metals sector (our opinion on the next 1-6 weeks): Bearish
Medium-term outlook for the precious metals sector (our opinion for the period between 1.5 and 6 months): Bearish initially, then possibly Bullish
Long-term outlook for the precious metals sector (our opinion for the period between 6 and 24 months from now): Bullish
Very long-term outlook for the precious metals sector (our opinion for the period starting 2 years from now): Bullish
As a reminder, Gold Investment Updates are posted approximately once per week. We are usually posting them on Monday, but we can’t promise that it will be the case each week.
Our preferred ways to invest in and to trade gold along with the reasoning can be found in the how to buy gold section. Additionally, our preferred ETFs and ETNs can be found in our Gold & Silver ETF Ranking.
Moreover, Gold & Silver Trading Alerts are posted before or on each trading day (we usually post them before the opening bell, but we don’t promise doing that each day). If there’s anything urgent, we will send you an additional small alert before posting the main one.
Thank you.
Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief
