Gold and silver moved down another notch with a score that went from -60 to – 70, still in a weak downtrend. The mining stocks, represented by Market Vectors Gold Miners ETF, symbol GDX took it on the chin today losing 3.5% and the triple leveraged miners NUGT and JNUG lost 10.42% and 14.78% respectively. If mining stocks lead gold, they presently indicate there is more room on the downside for the precious metals.
In overnight news, the European Central Bank cut their benchmark rate by 10 basis points in an attempt to stave off deflationary threats. The euro got hammered off the news and is currently down 1.60% on the day, a huge intraday move for a currency. The beleaguered currency has been on a one way slide all summer and is down 7.5% since the beginning of May. This has been good news for the USD which in turn has meant that gold has been constantly under pressure. The dollar is fast approaching 84 on the Dollar Index. The yellow metal has formed a triple bottom over the past three days at $1,263, also a Fibonacci retracement level, but it looks like it is struggling to maintain its footing here. Should gold decisively break below this level, next support doesn’t come into play until $1,240. Silver’s march lower continues as well with bids materializing right above $19 for the time being. A sweep lower in gold will surely mean bids evaporate while stops are triggered though… watch out!
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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