Entire Precious Metals Complex At Major Resistance

Precious metals and miners are all simultaneously at a rarely seen juncture, at least from a price perspective.

Today, the miners showed a very strong performance. It is a remarkable fact as the stock market closed without a particular gain (the S&P 500 in the US closed the trading session with a modest gain of 0.17%).

  • The HUI gold mining index closed 3.12% higher
  • The GDX gold mining index closed 3.30% higher
  • The GDXJ junior miners closed 4.20% higher
  • SIL silver miners closed 4.17% higher

This feels like the gold miners are about to lead the metals higher. If that would occur, our presumption is that the metals will perform a strong break out. The following charts explain why we think so.

Purely from a chart perspective, price patterns show that the whole precious metals complex, i.e. the four metals and the mining indexes, are all simultaneously trading at key resistance levels or at the end stages of a trading range. Let’s look at the different price charts.

The gold price is trading at a major resistance line. One could argue it is slightly above resistance. However, the daily chart shows that gold is still in a downtrend. A consistent break about resistance would result in a trend change. The key price level to watch is $1250 – $1260; gold should not fall below this price before the daily chart turns bullish. It would be a strong signal if gold would test $1250 – $1260 but not breach it.

gold price

 

The silver price has been building a base at $19 – $20 over the last three months. Key resistance comes at $20. If silver can trade consistently above that level, the daily chart would turn bullish.

silver_price_10_February_2014

 

Platinum and palladium have their own dynamics. They have been forming a 14-month trading formation, each on its own. Time is ripe to move outside this trading range. The key price levels to watch are $1450 platinum and $750 palladium; the daily chart turns bullish when both metals can break through those price levels and trade consistently higher.

platinum price

palladium_price_10_February_2014

 

The gold mining index HUI seems to be breaking the 16-month resistance line. This could mean a major trend change for the miners which have been literally beaten down as an asset class. The key price level to watch is 220 – 225. A trend change could result in life changing gains in gold and silver stocks.

hui_gold_mining_chart_10_February_2014

 

The charts tell a story on their own. You don’t need to be a seasoned chartist to see what is happening. Mind that the picture has not turned bullish yet. One should wait for a confirmation before becoming too optimistic.

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