PPR - Precious metals 2/11/14

Published : February 11 2014 at 9:36 ET

Gold miners have been well outperforming gold bullion over the last several weeks. Gold miner ETF GDX had another pocket pivot yesterday, inching it closer to 200-day moving average resistance. That said, GDX recently undercut lows and is bouncing strongly, implying the possibility it has found a floor. Gold and silver, meanwhile, are bouncing weakly, thus will gold miners pull up gold bullion, or will gold bullion pull down gold miners? We will continue to monitor both sectors closely for an answer. 

Fundamentally, QE is bad for currency and good for hard assets such as precious metals. But so many cross currents can affect the price of precious metals, making prediction based on fundamentals hazardous at best. Price/volume has been a far better harbinger of future price direction, especially during times when bases have finished forming and pocket pivots are issued which are then followed by a subsequent breakout. Precious metal pocket pivots can also provide clues as to when a floor is found. 

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