Both gold and silver have suffered technical deterioration over the past week with the result that they are now close to aborting the short to medium-term bullish scenario that was set out in the last update. Meanwhile, large Precious Metals shares are on the point of breaking down from their shallow uptrends in force from December - January after further losses this past week.
As we can see on its 6-month gold has not broken down below key support - yet, and it may even be at a buy spot right now, however, there are two external factors suggesting that the risk of it breaking down has increased significantly. One is that silver has broken below its mid-March hammer low, which is a bearish development, and the other is that the dollar looks like it may be completing a minor base area.
Returning to consideration of the gold chart we can see that last week's fall has not as yet resulted in it breaking below its early April low or below the 200-day moving average or below the support level shown. This confluence of supporting factors means that this is a very important zone, so if gold breaks below it, it could plunge way below the support of the downtrend channel shown. Traders may therefore want to set stops accordingly.
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