Commodities Market Wrap - Gold, Silver, Crude Oil and Mining Stocks

By: Douglas_V_Gnazzo

Gold
Gold put in another good week closing up $10.40 to $679.40 (+1.55%). This was gold's highest weekly close in 6 weeks, and was the daily high close for the week as well.

Gold's next target is the Feb. high of $686.70 on a closing basis and $692.50 on an intra-day basis. From there the next target is the multi-year high of May 2006 at $730.40 (intra-day).

Next up is the daily chart of GLD. It shows a clearly defined rising channel with the pog in about the middle of the channel with plenty of room left to the upside trend line.

Silver

Silver's chart is not as bullish as gold's. Note the negative divergence in RSI, and the recent negative cross over in the MACD indicator.

For the week silver gained .29 cents to close at $13.74 (+2.16%). It was silver's highest weekly close in five weeks, and it was the daily high close for the week.

Now it needs to put in a positive MACD cross over and correct the negative RSI divergence.

Next is the silver ETF chart (SLV). It shows a rising channel with prices below the middle of the channel but rising. There is plenty of room to the upside if it decides to keep moving in that direction.

HUI Gold Stock Index

For the week the Hui gained 16.46 to close at 354.15 up 4.66%. The gold stocks out performed the metal this week by about 3 to 1.

It was the Hui's highest weekly close in 6 weeks. It had a higher daily close on Wed. at $356.02.

The chart below shows resistance at approximately 362.00. Once that level is breached on a closing basis that holds, the next target is the Sept. 2006 high at 306-308, and then the long term high at 401.69 from May of 2006.

The second chart is the monthly of the hui/gold ratio going back 5 years. The ratio is trying to break out above its upper falling trend line. Such a move would be very constructive.

XAU Index

The XAU chart below shows overhead resistance fast approaching. MACD and the Histograms have turned up positive.

The xau/gold ratio has broken above its upper trend line; however, RSI shows negative divergence. So the signals remain mixed with the weight of the evidence leaning towards the bulls. It could go either way.

The long term monthly chart moves from the bottom left to the upper right - a bullish signature until it isn't.

Individual Gold Stocks

First up is Harmony (HMY), one of our largest holdings. The chart pretty much speaks for itself. A recent break out on high volume occurred along with a positive MACD cross over.

On balance volume is increasing sharply as well. Only caveat is that RSI is touching overbought and the recent move is parabolic and is reaching horizontal resistance levels.

Next is Goldfields (GFI), another of our largest holdings. It is bumping up against horizontal resistance at around $19. On balance volume has picked up significantly. RSI is approaching overbought.

The last chart is Miramar Mining, which we own as well. It too is bumping up against horizontal resistance, and has moved up on high on balance volume. RSI still has room to move up if it is so inclined.

By Douglas V. Gnazzo
Honest Money Gold & Silver Report

Douglas V. Gnazzo is the retired CEO of New England Renovation LLC, a historical restoration contractor that specialized in the restoration of older buildings and vintage historic landmarks. Mr. Gnazzo writes for numerous websites, and his work appears both here and abroad. Just recently, he was honored by being chosen as a Foundation Scholar for the Foundation of Monetary Education (FAME).

Disclaimer: The contents of this article represent the opinions of Douglas V. Gnazzo. Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Douglas V. Gnazzo is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Douglas. V. Gnazzo cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions. This article may contain information that is confidential and/or protected by law. The purpose of this article is intended to be used as an educational discussion of the issues involved. Douglas V. Gnazzo is not a lawyer or a legal scholar. Information and analysis derived from the quoted sources are believed to be reliable and are offered in good faith. Only a highly trained and certified and registered legal professional should be regarded as an authority on the issues involved; and all those seeking such an authoritative opinion should do their own due diligence and seek out the advice of a legal professional. Lastly, Douglas V. Gnazzo believes that The United States of America is the greatest country on Earth, but that it can yet become greater. This article is written to help facilitate that greater becoming. God Bless America.

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