The precious metals sector started September with a bang. Gold, which had already eclipsed $1300/oz, pushed to $1360/oz while Silver broke its downtrend line (from its late 2012 and 2016 peaks). Unfortunately, precious metals would soon reverse course and more. Gold ended September down nearly 3% and below $1300/oz. Silver lost 5% and its breakout. The gold mining indices (GDX, GDXJ, HUI) lost 7% to 8%. The monthly charts argue the major breakout from multi-year bottoming patterns will have to wait until 2018 at the soonest.
Gold’s bearish September reversal occurred at multi-year resistance. On a chart showing daily or weekly closing prices, Gold’s highest close in September occurred at the resistance line connecting its early 2014 and 2016 highs. In addition, Gold opened near $1330 (critical monthly and quarterly resistance), traded above it but then closed well below it. While it is difficult to see, Silver opened very close to key resistance at $17.80, traded up to $18.29 (near major monthly resistance) but closed the month well below $17.00. Silver failed in a resistance area that has been very important (note the arrows) for the past 10 years. Gold failed at a level that has been important since 2014.
This post was published at GoldSeek on 3 October 2017.