Silver just broke below its important support line, while gold and the GDX ETF moved to new yearly lows. The outlook for the precious metals sector has been extremely bearish and yesterday's action simply confirms it. Not just that, there's something more. Based on silver's breakdown, it's current price level and analogy to how precious metals declined during the 2012-2013 slide, it seems that our previous near-term target for silver was set too high. Let's take gladly what the market is willing to give us as the profit potential of this decline seems to be even bigger than previously expected.

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And so, it happened. Silver broke to new 2019 lows, while miners moved below their April lows. Gold seems to have given the head-and-shoulders top pattern the farewell "kiss" and is now on its way to new lows. The USD Index formed a perfect bullish reversal. All that happened while the final near-term uncertainty-based dam was broken. The Fed spoke and nothing really major happened. This is critical, because now the markets expect no additional surprises (remember the late-March shocker?) and they're back to business-as-usual. In other words, the previous trends can now resume. In case of the USD Index, the trend is up, and in case of the precious metals market, the trend is down. Very much down.

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Nothing has really happened in the precious metals market and yet, this nothing has been surprisingly informative. Why? As always, it's a matter of context. And this time, something very important took place behind the curtains. Gold and silver investors would be ill-advised to miss that. It is...

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Gold miners' small rally is over. The HUI Index just closed (a bit, but still) below its previous April low and all it took was just one session. Gold verified its breakdown below the head-and-shoulders top by moving temporarily back to the neck level and then declining once again. And silver? Silver provided the most classic bearish sign of them all. It broke above its resistance line only to invalidate it shortly thereafter. That's exactly how silver slides start. Let's buckle up and enjoy the ride lower. And in the meantime, we'll examine the long-term charts, outlook and milestones - after all, what good is an analysis of each tree, if one misses the forest?

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Gold, silver, and miners rallied, while the USD declined - that's how the last week ended. This may appear to be a bullish sign... Until you consider the closing prices. Did gold invalidate its recent head-and-shoulders pattern? Did miners? Did silver break above its declining resistance line? And - most of all - did the USD Index invalidate the breakout above the previous highs? None of the above took place. So, how much trust can gold investors and traders place in Friday's upswing?

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