And it's a fact. Miners supposedly bullish reversal was followed by a sizable daily decline. Just like it was supposed to based on the extremely low volume. GDX broke below its triangle pattern even without gold's help. Moreover, silver stocks broke to new 2019 lows. What's next?

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Gold and silver declined a bit yesterday, but mining stocks reversed and closed the session higher. It seems that the miners showed strength, especially that they formed a bullish reversal candlestick. But did they? The reversal candlesticks should be confirmed by strong volume and what we saw in the GDX ETF yesterday was the lowest daily volume of the year. In fact, the GDX volume was lower than any volume that we saw in 2018. And 2017. And 2016. And even 2015. The last time when we saw as low a volume was on May 21, 2014 (yes, exactly 5 years earlier). So, how should we read this price action?

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Yesterday's analysis was about gold being so boring that it's actually a strong sell sign. And, well, gold lived to its reputation yesterday. Nothing really happened in the yellow metal and nothing really happened in silver and miners either. In case of miners the "nothing" was very meaningful as it was the third day when the HUI Index - the flagship proxy for gold stocks - closed below the January lows, thus confirming the breakdown. Even though not much happened, the outlook for miners was reinforced and the likelihood of seeing another move lower this week increased further. And while a trigger is not necessary for the decline to take place, it seems that we might see one anyway. What might that be?

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The last few trading days in gold were quite interesting, but overall gold has been a quite boring market in the last couple of months. Gold's volatility index dropped to new lows as the current back and forth movement is just a small part of the same kind of movement on a broader scale. It's more of the same. And when gold's volatility gets very low, interesting things tend to happen next over 80% of the time. In other words, the situation in gold is now so boring that it's a signal on its own. In today's analysis, we'll dig into details and we will also discuss the likely reason for mining stocks' strength on Friday along with its implications.

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Gold clearly invalidated its breakout and silver broke to new 2019 lows. And it all happened in perfect tune with the previous patterns and our explanations. It took gold 3 days to form a top, just like it was the case with previous major tops. The geopolitical-news driven rally was short-lived. The breakouts it caused were invalidated. Even though it was rather fake, the recent upswing was not meaningless from the technical point of view. The price level that gold reached provides us with yet another confirmation of its precise downside target that is likely to be reached shortly - most likely this month.

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