Today has been momentous because the dollar has finally broken down from its giant 3-year long Broadening Top pattern, and fundamental developments suggest that it will continue to weaken, and since it has now broken down decisively, the rate is decline is likely to accelerate. These fundamental developments include the imposition of tariffs, long proven to be self-defeating and economically destructive, which invite retaliation and will slow the global economy, and the administration stating that it wants to see a weaker dollar as a means of increasing competitive advantage, which again will invite a “beggar thy neighbor” response from other powers. 

Thus the underpinnings of the stock market rally are being kicked away. The outlook for the dollar is now grim, but on the other hand the outlook for gold and silver could not be better, and they are now limbering up to break out of their giant Head-and-Shoulders patterns, and once they do will enter a vigorous bull market. Gold and silver stocks will soar when that happens, because after years of tough conditions, producing mining companies are slimmed down and efficient and rises in metal prices will go straight down to their bottom lines. 

For my subscribers, on Jan. 13, I presented 49 of the best gold and silver stocks for the imminent precious metals sector bull market. In the environment that we will soon be moving into you will basically be able to “throw darts” and pick winners in this sector, while most of the rest of the stock market goes into meltdown.

As we can see below, gold is now in position to break out of its giant base pattern that has taken almost five years to build out. The talk about it being suppressed by manipulation is largely “sour grapes”—the plain fact of the matter is that versatile investors were partying elsewhere, in the broad market, the FANGS, Bitcoin and Cryptos, etc., most of which will soon hit a wall. 

Ditto silver, which will take a lot of investors by surprise because it has been more depressed, but has the capacity to rally more strongly.

Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years’ experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.

Source: Clive Maund for Streetwise Reports   01/24/2018