The precious metals sector took a negative posture last week. The August gold futures contract put in a weekly bearish reversal signal. This negates the previous weekly uptrend to neutral.
With the possibility of a near resolution to the eurozone crisis early in the week, the metals markets reacted with bullish enthusiasm to be shortly disappointed by the lack of follow through with any concrete or definite plan of action.
It seems the central power players continue to kick the can down the road by maintaining a zero interest rate policy with no political or economic resolution as the world economy accelerates its downward spiral and fiat currencies like the euro currency continue to make record lows.
This could have more severe worldwide deflationary consequences increasing the probabilities that a major inflationary global stimulus package is not too far away, possibly as early as August.
Let's take a look at what the weekly charts in gold and silver are telling us for next week.
(click to enlarge)
The August (Comex) gold contract closed at 1.5789 -$30.5 (1.90%). The 52 week Range is: 1.9215 - 1,5293.
The market closing below the 9, 18, and 36 day MAs on a weekly basis, negates the previous weekly bullish reversal to neutral.
With the market closing below the Weekly Price Momentum Indicator of 1,593, it has set the weekly trend negative or bearish.
Look to take some profits if short as we reach 1.5614 and 1.5439 levels for next week. Strong physical buying support is expected to surface at these levels.
Sell rallies to 1,611 and 1.643 levels to cover longs and go short on a reversal stop. If short use the 1,643 levels as a SCO/GTC ( Stop Close Only and Good Till Cancelled ).
The December (Comex) Silver contract closed at 26.995 . The 52 week Range is: 44.19 and 26.20.
The market closing below the 9, 18, and 36 day MAs on a weekly basis, negates the previous weekly bullish reversal to neutral.
With the market closing below the VC Weekly Price Momentum Indicator of 27.49, it has set the weekly trend negative or bearish.
Look to take some profits if short as we reach 26.49 and 25.98 for next week.
Sell rallies to 28 and 29 levels to cover longs and go short on a reversal stop. If short use the 29 levels as a SCO/GTC ( Stop Close Only and Good Till Cancelled).
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AGQ, GDX, PSLV, AG, SLW over the next 72 hours.
Additional disclosure: Precious metals products trading involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.
