Going for Gold might be Going Nowhere for NowStrong short-term support level broken on Friday, indicating that further possible downside ahead. Should Friday’s break not turn out to be a false break, could see GDX test previous support level at $32.20.
We also saw the short-term 8-day Moving Average (EMA) break below the longer-term 200-day EMA, which is a clear indication that it might just get a bit darker before it turns bright again. All four the 8-, 21-, 50- and 200-day EMA’s are now point downward, clearly indicating an unhealthy short-term trend.
The 14-day RSI is also not in oversold territory yet, which confirms that more weakness is possible going forward.
I still believe with the amount of stimulus the US is pumping into their economy could have a positive effect for Gold and ultimately the Gold Miners over the longer-term. Patience however will be import over the shorter-term.
I expect GDX to test the $32 levels soon, just to rebound and test $38. Any traders who’s currently long, could watch $32 as a possible stop-loss, with a break below these levels, most probably bring back the mid-20’s into play. A break and close above $38 could be extremely bullish for GLD.
In short – hold for now, while accumulating/buying into further weakness.
