Precious Metal Sector Reaches Major Resistance (GLD, GDX, GDXJ, SGOL, UGL, DGL, DGP, IAU, DZZ, GLL, UBG, DGZ)

It’s been my expectation that gold would manage to rally at least to $1300 before dropping into the now due daily cycle low. We are now ready to test that theory as gold has tagged $1300 this morning.

The rest of the sector is also mashed right up against all time or bull market highs.

 
ETF Daily News Notes These Related Gold ETFs:SPDR Gold ETF (NYSE:GLD), Market Vectors Gold Miners ETF (NYSE:GDX), Market Vectors Junior Gold Miners ETF (NYSE:GDXJ), ETFS Physical Swiss Gold Shares (NYSE:SGOL), Ultra Gold ProShares (NYSE:UGL), PowerShares DB Gold (NYSE:DGL), PowerShares DB Gold Double Long ETN (NYSE:DGP), iShares COMEX Gold Trust (NYSE:IAU), PowerShares DB Gold Double Short ETN (NYSE:DZZ), UltraShort Gold ProShares (NYSE:GLL), UBS E-TRACS CMCI Gold TR ETN (NYSE:UBG), PowerShares DB Gold Short ETN (NYSE:DGZ).
 
 

I have my doubts that we will see all these resistance levels broken on the first try. We are also deep into the timing band for a daily cycle correction. This would be the most logical level for a corrective move to initiate from.

If gold is in a runaway move then any correction should hold within a 25 to 40 point range. My thinking is gold should drop about 35 points to test the breakout level at $1265.

A throw back to test the triangle breakout by the HUI would also be a normal corrective move.

Once silver & miners join gold at new highs the entire sector will be trading in a vacuum with no overhead resistance. This will be like throwing gas on the fire. And that is the recipe for huge moves.

Written By Toby Connor From Gold Scents 

GoldScents is a financial blog focused on the analysis of the stock market and the secular gold bull market.  

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