This might have been IT.
Gold is up, but miners are down.
Stocks stayed lower despite their intraday attempt to move back up.
Silver – the leader of the precious pack – is down.
And bitcoin just broke below its consolidation pattern.
Each of the above is bearish for the precious metals market on its own, and seeing all of them together only makes the bearish case stronger.
Yes, gold is up. But... It already reversed. This is expected as the current rally is driven by geopolitical threats (of the greatest caliber), and while the upswing that resulted was significant, it’s still likely to be temporary.
Miners also reversed today, but – unlike gold – they are lower on a day-to-day basis.
This makes subsequent weakness likely, which is particularly important right now, because…
Because a little more weakness in the GDXJ now will mean the invalidation of the breakout above its all-time (split- and dividend-adjusted) high. This, in turn, will serve as an epic sell signal.
Bitcoin is already below its flat pattern – seems ready to slide once again – and this decline as A LOT of potential. It’s not a move that needs to start – it’s a move that will simply continue.
And when the stock market slides, bitcoin – and tech stocks – will fall part. So will commodities to a large extent (and mining stocks to an even larger extent). Most likely even silver, as no market moves up or down without periodic corrections. Will the white metal be able to rally to $120 before the fall?
I’m not sure, but at this point, it might be a good idea to start preparing for hedging one’s long-term silver investments – perhaps using futures or options (while keeping the physical holdings intact). I’m not suggesting hedging those positions just yet, but this moment could be close.
I will provide the signal to my subscribers.
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Przemyslaw K. Radomski, CFA
Founder
Golden Meadow®