Based on the news from the Fed, gold rallied above the combination of the strong resistance levels in a very volatile manner. However, shortly after the intraday rally, gold started giving away its gains and at the moment of writing these words it’s trading at $1,318. While the intraday upswing may seem surprising, the move lower is not - the combination of resistance is very strong and gold is unlikely to break it. It’s much more likely to invalidate the intraday breakout shortly. And it seems to be doing this right now.

Moreover, this means that gold is most likely almost done forming a very bearish shooting star reversal candlestick.

At the same time mining stocks confirmed the above with an even more visible and profound shooting star reversal (this is based on the intraday prices, so it may change depending on the closing price).

Remember when we had bearish news from the Fed and gold declined initially only to rally shortly thereafter and then continue to soar in the following weeks. It seems that we’re seeing exactly the opposite today.

The USD Index moved to our downside target as well, which further validates today’s intraday reversals in gold and mining stocks and their bearish nature.

Mining stocks moved to our stop-loss level and while gold and silver didn’t (based on kitco.com and kitcosilver.com prices), gold futures did. Are we re-opening the positions right away? No. Today’s session is no game-changer for the medium term - at least not based on what we saw today. However, it’s unclear at what prices gold and mining stocks will close today’s session and based on these prices, the implications of today’s session for the short term may change.

We will provide more details in tomorrow’s regular Gold & Silver Trading Alert.

As always, we will keep you - our subscribers - updated.

Thank you.

Sincerely,

Przemyslaw Radomski, CFA
Editor-in-chief, Gold & Silver Fund Manager