Gold and Silver and the Miners in Focus – 16 June 2022

Gold futures reversed back through the 200 day MA once more today and also closed above the short term 21 day EMA, and so is potentially forming a higher low, following the spring at the lower channel line in mid March.

Of note is the very strong Relative Strength (RS) line that made a new high today, which is a strong divergence compared to the price action which is still a long way below its March high.

Dropping down the timeframes to the intraday 2 hour chart (using the GLD etf), you can see the fractal Stages developing on the lower timeframe, with a potential Stage 1 base developing over the course of the last month. 

Last Friday's price and volume action formed an Upthrust (UT) as it failed to make a Stage 2 breakout, and quickly moved back towards the lower end of the range on Monday, but managed to hold forming a higher low. So whether that was weakness in Gold itself, or correlation with the general market sell off, or margin calls elsewhere causing people to sell a more liquid assets like gold. You'll never know. All we can do is follow the price and volume action to try to determine whether it's showing accumulation or distribution characteristics. So we don't worry about the why, just analyse the result that we can see on the charts.

Silver using the SLV etf also made a similar move to Gold. But Relative Strength is much weaker than Gold, although it is starting to show outperformance versus the S&P 500 once more, as it made a higher higher ahead of its price action with a flattening zero line, and managed to close the day back above the short term 21 day EMA.

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Disclaimer: For educational purpose only. Not investment advice. Seek professional advice from a financial advisor before making any investing decisions.