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What Silver Is Telling Us About Gold


If silver is a technical indicator for gold, then the yellow metal is getting ready to pop up.

The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today's Highlight: Not that gold has been under accumulation, but its decline has slowed and gained no further traction. None of which would be bullish, except that silver is bubbling. At least a corrective bounce should be obvious Tuesday, unless gold's decline were to extend down substantially through the morning.

Dollar Basket
A little bit of weakness Monday wasn't enough to undermine the potential for breaking higher noticeably Tuesday. Not decisively rejecting last week's modest strength, despite starting the new week slightly weaker, suggests that a bigger rally can now begin.

Jun Contract EC; (NYSEARCA:FXE)
Monday's opening gap up duplicated Friday's character, which recovered from gapping down. But no traction was gained for either effort, so Tuesday's open is almost obligated to make clear the decline has resumed.

Jun Contract GC; (NYSEARCA:GLD)
Monday didn't dip immediately to fresh lows, only eventually. And the fresh lows didn't trend down aggressively. Otherwise, nothing was new about the decline, which would now trigger a corrective bounce above 1295.00 targeting to 1298.00 and potentially 1317.00.

May Contract SI; (NYSEARCA:SLV)
Monday's gap up settled back down to 19.75 support, but no lower, suggesting that a bigger bounce targeting 20.70 is trying to begin.

30-Year Treasury
Jun Contract US; (NYSEARCA:TLT)
Monday's open gapped down and extended lower intraday to 132-16. Recovering back above 132-24 -- a 61.8% retracement of the rally to Thursday's test of the 134-06 target -- suggests the pullback has ended. Back above 133-06 through Tuesday's open (already tested Monday afternoon) would target a retest of 134-06 target.

Crude Oil
May Contract CL; (NYSEARCA:USO)
Friday's bobble and Sunday night's weakness was recovered Monday back up to 102.00, maintaining the rally's momentum without allowing any sell signal to form.

Natural Gas
Monday's opening plunge back to 4.35 retraced all of the follow-through from last week's gap up, but not the gap up itself. That should be done soon, as the pattern already had undermined its upside momentum.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
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No positions in stocks mentioned.
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