In his weekly precious metals market update, technical analyst Jack Chan charts the latest moves in the gold and silver markets.
Our proprietary cycle indicator is down.
The gold sector is on a long-term sell signal. Long-term signals can last for months and years and are more suitable for investors.
The gold sector is on a short-term sell signal. Short-term signals can last for days and weeks, and are more suitable for traders.
Our ratio between gold and gold stocks is on short-term sell signal.
Speculation is now at net short for the first time since 2001.
Silver is now on a long-term sell signal.
iShares Silver (NYSE:SLV) is on a short-term sell signal, and short-term signals can last for days to weeks, more suitable for traders.
Speculation is at net short again.
Our ratio between gold and stocks is now at the same oversold level as in July 2015, the start of the multi-month bottoming process before the 150%+ rally in early 2016.
Summary
The precious metals sector is now on a long-term sell signal, which is suitable for trading and not for long-term holding. Short-term is on mixed signals. The cycle is down. COT data is at extreme levels, which suggests that a recovery will occur soon. We are looking to exit our long-term positions upon a recovery rally.