Is the Bottom In For Gold and Silver?

The HUI Index is pulling back slightly after a terrific run to the upside from the LOW of 179.42 posted on November 3rd and the recent HIGH of 227.08 posted on November 15th. An outstanding run after months of a relentless downtrend.

So are we there yet? Is the DOWNTREND over? A DOWNTREND is defined as a series of LOWER LOWS and LOWER HIGHS. Since we now have a HIGHER LOW and a HIGHER HIGH, the downtrend is in fact over.

I can't tell you what to do because I am just some dude on the inter web. However, this is a game of patience. What I would like to see is a pullback down to around the 208-210 level on the HUI. And then another leg up to take out the recent HIGH of 227. I will be looking to trade on a strong up bar above the 227 level.

So we shall see what the next few sessions have in store. A reminder that next week is Thanksgiving so volume should be very small heading into Thursday.

Gold is the same story as the mining shares a nice pullback to retest the breakout level around $1725 followed by a rally over the recent HIGH. A good solid HIGHER LOW followed by a rally would confirm that gold is finally out of the DOWNTREND.

Silver is already at the retest level of the recent breakout. Watch silver carefully as it seems to be the leader in the precious metals markets.

If you may recall, I have been posting that silver had been range bound between $18 and $21 per ounce. Today silver pulled back to the top of the range in what is hopefully just a retest.

And here is the WARNING for the Bulls, if silver slips back down into the range then the recent move may be a "fake out" as opposed to a breakout.

source: JM Bullion

The premiums on American Silver Eagles remains steep at around $17 per coin.

Peace out and Stack on!