By the end of week we saw that gold soared but miners didn't-The HUI index didn't even close or move above it's march highs,silver performance was confusing or mixed but the question is why did gold rally where silver and miners didn't?
Let's start from addressing our first question that why did gold rally in the previous week?from our analysis we think that the increased tension regarding interest rate and first fed meeting of powell's contribute a lot in temporary volatility which we have witnessed,when we tried to compare the performance of mining stocks relative to precious metals market it certainly seems that precious metal market wants to go down,but there is another fundamental development that precedes gold rally in short term,let's be practical some geopolitical event like trade problems between US and china and few threats between the north korea and US also have there own rule in escalating the price of gold in short term but what now?
The movement of price will depend on two factors from here-first is how the investors want to react and second is based on how the safe haven factor comes into play due to trade conflict going on,we can predict the first factor,second factor is not in our control so why waste time there
The long term factors present in chart can't be easily manipulated just like by recent news which caused short term upswing,The outlook remain clearly bearish,ok let's dive into chart www.tradingview.com/x/6RunDs5A/
we hade a similar situation in our previous post in which gold was likely to go down before the end of month.we also warned you about forming a triple-top and an extra upswing,we also dicussed how it was similar to what we already saw in the past
Based on last week;s upswing did anything which we warned you become entirely validated?
No,The rally didn't change the apex based turning points and it didn't change the fact eother that the shapes of declines are often similar.YES but one thing is surely changed that is the starting point of decline,if the price of gold declines like it used to be in the past then we could have expect that price will reach to the red rising support line in the fisrt half of april but as the situation no longer supports our earlier expectation the price level that we decribed previously stll likely to reached but a bit latter
Gold's long term chart shows that even gold made its short term upswing but the upside potential from here is very limited,past multiple rallies occur ended close to 1350-1360 so the resistance is very strong,you have already witness the downfall in gold after reaching it's strong resistance
silver upcoming reversal-The situation didn't change much in the case of silver,The white metal made a upswing on friday but the rally was not significant,silver only moved above the wednesday's intra high and closed the session to the apex of triangle,while if we go to our apex of triangle method-it's indicating a reversal,currently it serves as a perfect bearish signal,
OK moving to gold stocks-Even after the upswing in gold, gold stocks didn't manage to move even to march high ,gold moved to previous 2018 high and mining stock are barely moving,This under performance has a lot to say,some may even argue with us that gold stocks weak performance is not really a bearish sign because it's only the result of declining stock market?
as usual it doesn't explain the whole story,HUI INDEX didn't above 200 but only to 184-190 if that was the case we will not argue with them but gold stock performance was much weaker than just that-it didn't move close above 180
The S&P 500 index closed where it closed on 8th feb,on 8th feb gold closed at 1319 and HUI closed at 179,Yesterday gold closed at 1349 and HUI closed at 177,That's extreme underperformence and an increadible strong bearish sign
our signals are well up-to-date
