Precious Metal Forecast: Gold, Silver At New Lows, U.S. Dollar Holds

 |  Includes: ABX, GLD, NEM, SLV
by: MetalMiner

By Raul de Frutos

This week, while Barrick Gold Corp (NYSE:ABX) and Newmont Mining Corp (NYSE:NEM) are talking about a merger, gold and silver are hitting 3-month lows.

Silver is down 13 percent since its February peak, while gold is down 8 percent since its March peak.

Gold and Silver ETFs – 6 months

The precious metals fell in high trading volume (the yellow circles) which indicates that many hands are selling gold and silver. The current picture suggests that we might see further moves to the downside.

Meanwhile, despite recent fears, the stock market surged during the past few days. The stock market still looks healthy and that leaves less money for the so-called safe heaven assets.

Finally, the dollar seems to be finding support:

USD Dollar Index – 6 months

Unless the dollar falls to new lows, we don’t expect silver and gold prices to come back.

What This Means For Metal Buyers

Silver and gold are falling to new lows. The current picture tells us that we could see more to come on the downside. We believe that there is no need for buyers to take long-term positions. In a falling market, it might make sense to wait for bullish signals before making early decisions.