The US dollar is rolling over and could test the January low (89.20) relatively soon. Breaking critical support could a sharp decline and become a tailwind for precious metals.
-US DOLLAR- The US dollar (currently 89.79) is getting dangerously close to the January low of 89.20. A breakdown below 89 and then 88 would be incredibly bearish and could trigger a steep decline into August or September. If a breakdown is established, that would conceivably propel precious metals significantly higher.
-GOLD- Gold is above the intermediate trendline and cleared the 200-day moving average. Despite all this, interest in the sector remains low. I think the 8-month decline devastated sentiment. Currently, prices are coming into resistance around $1878. If they clear that, I think we could see $1900 to $1920 later this week. All-in-all, prices remain on track towards our $2000+ target by July or August.
-SILVER- Silver is above $28.00, and this is where I’d like to see the uptrend begin to accelerate. Prices remain on track for a breakout above $30.00.
-PLATINUM- Platinum continues an upward slanting consolidation. Prices need to close decisively above $1280 to register a breakout. Whereas a finish below $1180 could trigger a pullback back towards $1100.
-GDX- Miners jumped sharply Monday and are up nearly 30% from their March bottom. Surprisingly, sentiment remains bearish – I’m not sure why. Overall, we remain on track to test and likely exceed last year’s $45.54 high by July or August.
-GDXJ- Junior’s recaptured the 200-day MA, and the trend may finally begin to accelerate. I think a breakout in silver above $30.00 could send prices piercingly higher. Overall, I expect GDXJ to test and likely exceed last year’s $64.91 high.
-SILJ- The junior silver ETF is back above the $17.00 level and could be on the verge of a breakout. Target-wise, I think SILJ could run to $25.00 or higher if spot silver reaches our minimum target of $36.00.
The FOMC minutes come out today at 2:00 PM. I will be watching for inflation concerns.
In closing, gold miners should continue to lead and outperform gold over the coming weeks. Our Premium Metals Portfolio focuses on high-quality miners with excellent cash flow.
Near-term, I will be watching silver and platinum for a breakout to fresh highs. Their trends are primed and could explode higher.
AG Thorson is a registered CMT and expert in technical analysis. He believes we are in the final stages of a global debt super-cycle. For regular updates, please visit here..
For a look at all of today’s economic events, check out our economic calendar.