Precious Metals Breaking Out

Chart 1: Precious Metals sector is breaking out of its downtrend

Precious Metals Sector Source: Stock Charts (edited by Short Side of Long)

 
The technical downtrend that has persisted in the Precious Metals sector since October 2012, as QE3 was initiated, seems to be finally be coming to an end. So far, three out of the major four assets within the sector are breaking out, from the technical perspective. Gold is just joining the party as of yesterdays price move, while Silver continues to hesitate for now.
 
How do we know if the rally will be sustainable?

Wel, we never do. Investing is about probabilities. Having said, the chart below shows that Gold miners are showing decently strong participation during the current rally. More and more components out of the index are breaking out above the 50 and 200 day moving averages – something we haven’t seen since middle of 2012.

Chart 2: Participation in the Gold Mining Index is signalling a rally
 
Gold Miners Breadth Source: SentimenTrader (edited by Short Side of Long)