Precious Metals Rally: Now Or Never?

| November 19, 2015 | 0 Comments

precious metalsDo Technicals Point To A Precious Metals Rally?

It’s decision time for gold and silver bulls…

Both assets have suffered mightily in recent weeks thanks to the growing likelihood the US Federal Reserve raises interest rates in December.  Not surprisingly, the increasing odds of soon-to-be rising rates has the US Dollar index leaping towards multi-year highs.

Take a look…

US Dollar

As you can see, investors are piling into the greenback, sending it towards the early 2015 highs.

Without question, the strong bullish move in the dollar has decimated gold and silver the past month. 

As of yesterday’s close, both metals had declined 15 days in a row- the longest consecutive day downturn I can remember.

To make matters worse, November’s weakness sent gold to a new multi-year low and silver very close to it.

But here’s where it gets interesting…

The recent downturn has both metals trading at very important long-term technical support.

Let’s start with gold…

gold prices

The yellow metal is trading at the 50% Fibonacci retracement from the 2001 low to the 2011 high.  While some will argue the veracity of Fibonacci levels, I can tell you with certainty that these levels play an important role in the marketplace.

Here’s the deal…

The 50% retracement level in gold roughly corresponds with $1,060 an ounce.  As a result, bulls need to make a big stand at this price.  If they don’t, there’s a growing risk of an abrupt downturn to $1,000 or lower.

What about silver?

silver prices

Notice how the metal is flirting with the long-term trend (green line) from the 2003 lows.   Again, if bulls want a fighting chance in 2016, they need this essential technical support level to hold.

If it doesn’t, I wouldn’t be surprised to see silver careen towards $10 an ounce in coming months.

Bottom line…

Given the soaring dollar and bearish sentiment towards the precious metals space, gold and silver bulls are facing stiff headwinds.

However, the important technical levels revealed above could be just the ticket they need to kick off a surprise precious metals rally.

How do you capitalize on such a situation?

Gold and silver focused commodity ETFs offer investors a relatively easy and cost efficient means to play precious metals market trends.

Until Next Time,

Justin Bennett

BIO:  Justin Bennett is the head commodity research analyst at Commoditytradingresearch.com.  With over a decade of real world trading experience, he finds ways for you to consistently profit from movements in commodities and the companies producing them.  Sign up for our free reports and commodity newsletter at http://commoditytradingresearch.com/free-sign-up.

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Category: Precious Metals, Technical Analysis

About the Author ()

Justin Bennett is the editor of Commodity ETF Alert, an investment advisory focused on profiting from the ebb and flow of important commodities via ETFs. The commodity veteran and options specialist is also a regular contributor to the Dynamic Wealth Report. Every week, Justin shares his thoughts with our readers on a variety of commodity-related topics. Justin is also a frequent contributor to Commodity Trading Research’s free daily e-letter. And he’s the editor of another highly successful and popular investment advisory, the Options Profit Pipeline.

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