Although gold had the conditions to rest for a while and fall only a little, it chose a more radical path and hit new monthly lows. Can it move lower?
In yesterday’s video analysis, I emphasized that gold, silver, and mining stocks are moving lower, and that they can do that regardless of the possible rally in the stock market. Let’s start today’s analysis with a look at how perfectly the markets confirmed what I said yesterday.
Stocks ended yesterday’s session higher. So, theoretically, gold, silver, and mining stocks had a good reason to rally yesterday and do nothing today.
The influence coming from the dollar index Index is somewhat similar.
Nothing really happened yesterday, and the USDX is up just slightly in today’s overnight trading. Thus, gold had a good reason not to do anything yesterday, and decline just a little today.
Instead, gold just moved to new monthly lows.
This is not really supported by the moves in either the stock market or the USD Index. It seems that gold simply wants to decline here.
Since it recently broke below a very strong support area (that it then verified as resistance), it seems that gold could fall significantly soon.
While gold is weak, maybe the junior miners are strong?
While they didn’t move to a new monthly low just yet, it’s clear that their short-term downtrend continues, and the theoretically positive impact of the general stock market doesn’t affect them in the way it “should”. Consequently – that’s right, you guessed it – it seems that junior miners really want to slide once again.
Given the analogy to 2013, it seems that they can now slide really profoundly.
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