Gold is attempting to break out from a three year downtrend line
In a recent article published at the end of September, we made a prediction that the Precious Metals had a decent chance of rebounding out of its short term oversold conditions. Our reasoning was linked to diminishing probabilities of a FOMC rate hike, which should support the sector, other commodity prices and also weaken the dollar (at least for awhile).
Technically, the price and pattern conditions haven’t changed all that much, despite our correct prediction of a short term rally. Out of four major asset classes within the precious metals sector, only Silver (NYSE: SLV) has recently managed to overcome its downtrend line resistance. Gold mining companies (NYSE: GDX & GDXJ) are still pressing against their downtrends, just like Gold (NYSE: GLD) itself.
Is Silver’s early break out signalling a change in trend or will this be just be yet another fake out? We continue to watch the developments closely and on daily basis for clues.
Silver’s break out from a downtrend might be an early bullish signal