We may have just experienced the quietest bottom in gold ever - if it proves true we can call it the Victoria Day Precious Metals Bottom and the vast majority of the world will have no idea what we're talking about. 

Yesterday's upside reversal in gold after a marginal new low for this correction ($1281) came with a number of bullish divergences:

  • Silver did not come close to making a new low, and has in fact made consecutive higher lows for the month of May.
  • Gold miners have continued to exhibit relative strength.
  • Yesterday's low in gold occurred with subtle bullish divergences in MFI and RSI on multiple time frames.
  • Both palladium and platinum had extremely bullish trading sessions on Monday. And in the case of palladium the white metal posted its second consecutive higher low from its low near $890 in early April.

As I have posted on the index on CEO.ca the CoT data is constructive enough that we could see a tradable low in gold at any time now. Yesterday we may have gotten it and it seems barely anyone was paying attention (partially due to a market holiday in Canada for Victoria Day). Upside levels of note are $1310 followed by $1325, meanwhile $1281 now takes on greater importance. A classic scenario would be a rally up into the $1320s followed by a retest of $1281.

Another item worth noting which increases my confidence that yesterday may have been an important low in precious metals is the chart of the US Dollar Index:

USD Index (Daily)

A 'shooting star' candlestick from an extreme overbought and overextended condition. A roll-over in the US dollar would add rocket fuel to gold. 


DISCLAIMER: The work included in this article is based on current events, technical charts, and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. This publication is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.