news.goldseek.com / By Jordan Roy-Byrne, CMT / 2 October 2015
Two months ago the precious metals complex became extremely oversold and ripe for a rebound. Two months later and the overbought condition and bearish sentiment has been alleviated to some degree. Sadly for bulls, Gold barely rebounded while both Silver and gold miners performed worse. The broad precious metals sector appears to be in position for a breakdown that could be a knockout blow to gold bulls and gold bugs.
The weekly candle chart of Gold and Silver is shown below. Gold failed to clear $1160 in August and failed to close above $1150 last week. Gold is already down $33 this week and threatening to break lower from a triangle consolidation. Meanwhile, Silver has tried to surpass $15.50 but has failed a handful times. It is threatening to close at a new weekly low. The metals broke support in the summer and are threatening to break to new lows after retesting resistance (former support). This is textbook stuff.
The prognosis is the same for the miners. The daily bar charts for GDXJ and GDX are below. While the miners have held support, they have failed to generate anything during the rebound in Gold. Both GDXJ and GDX fell below their 50-day moving averages on Monday and have failed to recapture them. After Wednesday’s strength the miners failed again at their 50-day moving averages, leaving a bearish reversal and very little breathing room.
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