Friday, July 17, 2015

Precious Metals Sector - Hard Times For Gold Bulls To Be Continued?

Today we have another bad day for the gold bulls. Bears, who have been controlling the PM (precious metals) market since 2011,  are trying to break the gold support once again.

Looking at the relative strength of gold against world equities, one could easily spot that on this front the gold bulls are loosing once again:

But I have a chart, which could make the gold bulls a little happier. Please, look at it:

The chart shows the relative strength of silver (SLV) against gold (GLD). The chart line is going down, which is a sign of a bear market in the precious metals sector (silver going down faster than gold). The chart confirms that since 2013 silver has been much weaker than gold.

For example, every time the 50-day simple moving average (50 SMA) had been closing to the 200-day simple moving average, it was not able to break above its 200-day sister (200 SMA). These days we have the similar situation once again. It seems that 50 SMA is going to bounce down once again.

But if it fails to do that - and it could make the gold bulls happier - a new up leg in PM sector could start shortly after that.

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