In the course of the past week, several exceptionally interesting charts were released on GoldSilverWorlds and other websites. In this article, we collect the most interesting charts expressing gold’s fundamental and technical picture.

Weekly chart in a downtrend but at major resistance

The lack of downside follow-through, after the highest volume bar 7 trading ranges ago, has been an anchor for the current rally, of sorts. The caveat as to which way price will move from here is the trend, which favors lower price behavior until there is an indication of change. Right now, such an indication is absent. Of minor concern is the location of the closes for the 3 bars at the end, tending toward the lower range of each bar. The offset is the fact that despite apparent weakness, price did not move lower. If gold trades higher next week, the daily trend will turn up, and confirmation will come from a lower swing high on the next correction (source).

….go HERE to view larger images & all 6 Charts & Commentary 

….view the other 5 topics & charts HERE

It does not appear that this is the final low for gold as yet. However, a daily closing ABOVE 1293.50 on the cash will signal a move to the upside is possible. The major resistance remains at 1455.00 on a weekly closing basis in cash. On a weekly closing basis in the nearest futures we need a closing ABOVE 1294.00 to also signal a rally near-term is likely.

This simply becomes possible because of the large degree of bearishness that exists. This needs to be cleaned out to some extent. There is no indication as of yet that we are dealing with a major change in trend. This could easily just prolong the final low into 2015.

also from Martin:

Europe is a Basket Case – Just Turnout the Lights Now & Save Energy

Economic data releases out of China and Federal Reserve chief Janet Yellen’s first congressional appearance since being sworn in Feb. 3 could influence gold prices next week.

In the U.S., economic data will focus on the consumer, with retail sales one of the main reports slated for release next week.

Economic data releases out of China and Federal Reserve chief Janet Yellen’s first congressional appearance since being sworn in Feb. 3 could influence gold prices next week.

The gold and silver stocks have rebounded nicely but have consolidated in recent weeks. Where is this going and how do we know? Well, a few weeks ago we publicly said that a major bottom is in. Thus, we believe the trend will go higher. Beyond belief, we need real confirmation that the sector will continue higher. Enter moving average analysis. By using a few simple moving averages we can better understand the current context and get confirmation that the sector will continue to move higher. GDX, GDXJ and SIL could soon test moving averages which have been resistance for the past 13 months.

First lets start with GDX. The 150-day moving average provided resistance at the start of 2013 and then the market declined and remained below its 50-day moving average for months. The 150-day moving average provided resistance again after the June bottom. Now that the market has reclaimed the 50-day moving average which has turned up, it is in position to break above the 150-day moving average which is flat and no longer declining. Keep an eye on the RSI which should push above 70 to confirm a breakout. Upon breakout, the medium term target becomes $31.

There is a similar picture in GDXJ. The market failed at the 150-day moving average in January 2013 and then remained below the 50-day moving average until August. The summer rally failed at the still declining 150-day moving average. Now GDXJ has reclaimed the now rising 50-day moving average and is in position to breakout above the 150-day moving average. The RSI recently hit 70 and has remained above 50 during this consolidation. It definitely needs to push above 70 in a breakout scenario. In the breakout scenario the medium target becomes $51.

For SIL and the silver stocks we use the 200-day moving average. That average provided support in November 2012 but then resistance in February 2013 and then for the summer rebound in August 2013. SIL has now reclaimed the 50-day moving average and is in position to retest the 200-day moving average. Again, look for the RSI to confirm the breakout. In that scenario, the next resistance target becomes $16.50.

The near-term analysis is quite simple. The 50-day moving average appears to have become strong support for these markets which appear ready to test what has been resistance over the past 13 months. Note how that resistance (the moving averages) is no longer declining but is flat or flattening. That illustrates how the downtrend is all but over. A strong close above the moving averages will all but confirm that the downtrend is over and could more importantly lead to some very strong moves. GDX at $24 has an upside target of $31. GDXJ at $37 has an upside target of $51 while SIL at $12.50 has an upside target of $16.50. Keep an eye on these markets as a breakout above these moving averages would be quite significant. If you’d be interested in learning about the companies poised to outperform the sector, then we invite you to learn more about our service. 

Good Luck!

Jordan Roy-Byrne, CMT

Jordan@TheDailyGold.com

ABOUT THE DAILY GOLD

Jordan Roy-Byrne, CMT is a Chartered Market Technician and member of the Market Technicians Association. He is the publisher and editor of TheDailyGold Premium, a publication which emphasizes market timing and stock selection for the sophisticated investor, as well as TheDailyGold Global, an add-on service for subscribers which covers global capital markets. From 2010 through September 2013 The Daily Gold Premium Model Portfolio was up 83% compared to GDX (-39.2%) and GDXJ (-52.0%). The Model Portfolio which focuses entirely on gold and silver stocks also dramatically outperformed the S&P 500 (+48.5%) in spite of the S&P 500 dramatically outperforming gold and silver stocks.

Contact: Jordan @ TheDailyGold.com

The errors of financial policy, led by the world’s central banks have once again created the makings of a massive crisis. Blind to risk, and completely captured by politics and ideology, it is as if the Federal Reserve and it’s counterparts have been awarded a total mandate. All of the misplaced and mispriced  risk is poised to flood toward precious metals.

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