Got Copper or Gold Miners? Watch Out / Commodities / Metals & Mining
Copper, silver, and gold quite often movetogether, especially during the big moves.
Impending Massive Slide
And this is currently very helpful.
Given gold’s recent decline and a muchbigger decline in silver and mining stocks, one might wonder whether miners’and silver’s weakness are telling the truth about the precious metals market’soutlook, or if it’s gold that’s been holding up relatively well.
This is where looking at copper might beuseful. This extra detail might make one or the other scenario more likely.
Let’s check the PMs first.
The GDXJ is down substantially, below ourentry orders for the current short position (we had opened a long position inminers betweenNov 14 and we tookprofits on Nov 21; we then entered a short position in the miners Nov22 with GDXJ above $48) and the size of this quick decline isalready bigger than what we saw in the previous weeks. That’s already a signthat this is more than just a correction – the same goes for the breakdownbelow the rising support line.
Silver is close to its recent lows aswell.
Meanwhile, gold is above its decliningsupport line as well as its December low (let alone its November low).
What can copper tell us here?
Copper recently invalidated its breakoutabove the declining resistance line. It’s done so in terms of the daily closes,which was already a bearish sign… But today we see something new. We see an invalidation also in intraday terms, which serves asan additional bearish confirmation.
Besides, FCX, the copper and gold stock(that we’ve been shorting as well) already moved below its previous Decemberand November lows.
FCX’s relative weakness compared to theprices of copper and gold indicates that they are all likely to move lower.
And given today’s move below the risingsupport line, which is also the neck level of the head-and-shoulders pattern,it seems that we’re on a verge of a massive slide.
Since sizes of the declines that followthis pattern tend to be similar to the sizes of the head, it seems that we cansee a decline to $30 or lower relatively soon – in the following weeks.
Short-Term GoldRally Unlikely
A confirmation of the breakdown wouldincrease the odds for this scenario even further, but even the relativeweakness of FCX and invalidation of the breakout in copper make this large movelower likely.
This, in turn, makes a move lower in theprecious metals market even more likely.
Besides, the USD Index is moving higheronce again, which is a bearish factor for commodities and precious metals.
Yes, the USDX is once again above its2023 highs. And since the correction was quite visible and managed to take RSIback to 50, it seems that another powerful upswing can start, especially that…
The USD Index’s biggest component – theEUR/USD pair invalidated its medium-term breakout and it even tried to breakout once again – and failed.
This means that another round of declinesis likely just around the corner. This is yet another reason to expect lowerprecious metals and – especially – mining stock values in the following weeks.Now, don’t get me wrong. Gold has merits as an investment, especially forinsurance purposes, and especially if you allowit to earn interest, but for trading purposes, I don’t think thatbetting on its near-term rally is a good idea.
The above is up-to-date at the moment ofposting this, and I’ll report any updates to my subscribers.
Naturally, the above is up-to-date at themoment when it was written. When the outlook changes, I’ll provide an update.If you’d like to read it as well as other exclusive gold and silver priceanalyses, I encourage you to sign up for our freegold newsletter.
Przemyslaw Radomski, CFA
Founder, Editor-in-chief
Toolsfor Effective Gold & Silver Investments - SunshineProfits.com
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All essays, research and information found aboverepresent analyses and opinions of Przemyslaw Radomski, CFA and SunshineProfits' associates only. As such, it may prove wrong and be a subject tochange without notice. Opinions and analyses were based on data available toauthors of respective essays at the time of writing. Although the informationprovided above is based on careful research and sources that are believed to beaccurate, Przemyslaw Radomski, CFA and his associates do not guarantee theaccuracy or thoroughness of the data or information reported. The opinionspublished above are neither an offer nor a recommendation to purchase or sell anysecurities. Mr. Radomski is not a Registered Securities Advisor. By readingPrzemyslaw Radomski's, CFA reports you fully agree that he will not be heldresponsible or liable for any decisions you make regarding any informationprovided in these reports. Investing, trading and speculation in any financialmarkets may involve high risk of loss. Przemyslaw Radomski, CFA, SunshineProfits' employees and affiliates as well as members of their families may havea short or long position in any securities, including those mentioned in any ofthe reports or essays, and may make additional purchases and/or sales of thosesecurities without notice.
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