The gold and silver miners put in a good today bouncing back with the Amex Gold Bugs Index, the HUI gaining 5% to close at 175. The clamour will be for the resumption of the bull market rather than a short squeeze which caught the bears having a nap.
The US dollar has rallied hard especially over the last 6 months and speculators may be now of the opinion that it is time to take profits and put their cash into another market sector. Whether or not gold and silver will be the beneficiaries of a possible sell off in the dollar remains to be seen. During in today’s trading session the Yen, Euro and the Pound all improved which no doubt hampered the dollars progress, however, the dollar still looks to be the best horse in the glue factory.
For today’s action to be the beginning of a new bull market we would like to see the following resistance levels penetrated.
Gold: To close above $1250/oz.
Silver: To close above $17.50/oz.
HUI: To close above 180.
If they can manage to get above these levels and stay there it wouldn’t necessarily mean that we should back up the truck but it would be indicative that higher resistance levels were to be challenged.
The next few days will be interesting as will Janet Yellen’s press conference on 17/18 December 2014 as talk of raising interest rates sooner rather than later would dent gold’s progress.
So the question is; is this the real deal or another head fake? Is the bottom really in? Could there be a final capitulation just ahead of us?
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