The previous week is over and even though we haven’t seen any significant volatility in its final part, it doesn’t mean that we haven’t seen any meaningful signals. We did and one of them has important implications for the short term and a few others have much more important implications of the medium-term nature. Based on today’s sizable decline in gold and silver, it seems that the short-term signal has already worked.
The general stock market declined visibly in the last two trading days of the previous week and if the stocks are about to slide, it may be a good idea to prepare for such a decline. That’s what we’ll discuss in the following part of today’s analysis. For now, let’s start with the short-term charts and short-term signals (charts courtesy of StockCharts).
Gold’s and Silver’s Tiny Rally
In Friday’s Alert, we wrote the following about gold’s inability to move above the previous highs:
There are attempts, but each of them fails a buyers are overwhelmed by the selling pressure. And the tiny details confirm the bearish outlook. In the past 3 days, the closing prices were lower each day and we can say the same thing about the levels that the price reached intraday.
There was yet another attempt of gold to move higher and while gold ended the session higher, the intraday low was once again lower than in the previous days. Overall the tendency for gold to move back and forth but lower overall remains in place.
We saw the same thing in silver.
The intraday high was once again lower than on the preceding day. And once again, there was only an intraday attempt to move above the 50-day moving average that was invalidated before the session’s closing bell.
The above, plus silver’s recent short-term outperformance continue to support lower prices in the upcoming days and weeks. The outperformance can be seen even more clearly on the SLV ETF chart.
