Gold prices have backed down a bit and are almost exactly at the price where we entered our short position several weeks ago so I am going to be cautious here and cover this position today with no loss. (We already covered our silver shorts at a break even level on Monday.) Gold and silver are very tricky to call right now. Silver has almost certainly started a new medium-term cycle with its $14.85 low on April 1. Gold's new cycle may have started with the $1,208 low of March 27 or that bottom may be yet to come at a lower level over the next week or two. We probably want to buy close to these cycle bottoms, and we are now moving into a time period over the next week or two when there could be a strong reversal in price movements. This may give us an opportunity to buy both metals at a lower price (especially if gold hasn't hit its cycle bottom). COT (Commitment of Traders) charts still show Commercial positions to be bearish on both gold and silver so this supports the idea of a reversal soon despite the fact that the overall trend of the precious metals appears to be turning bullish. Covering (unloading) my short position in gold today. Now on the sidelines of both gold and silver.
The U.S. Dollar Index is now rallying from strong support around 94. If this rally can gain legs it would also support the idea of precious metal prices turning back down soon.
The broad stock market is rallying some more today and the DOW, S&P 500 and NASDAQ are all making new monthly highs. This means there will be no intermarket bearish divergence signal this week, but we could get this next week when we move into a strong reversal zone. Stay tuned. Still on the sidelines of this market.