Where could gold go next?
''Gold failed to breakout in the spring and recently lost weekly support at $1310. Meanwhile, the gold stocks have held up well in recent weeks (considering gold) but still have much to prove. Silver couldn’t rally much when its net speculative position was at an all-time low. The question now is where do things go from here? The price action is not bullish but with a Fed hike looming and negative sentiment, gold could be poised to snapback after testing lower levels. The technicals for gold show a strong confluence of support at $1265 to $1270. It has traded as low as $1281 in recent days. Trendlines and long-term moving averages coalesce at $1265 to $1270. A little bit more selling could bring gold down to key support.
Turning to the miners, we find a sector that continues to be wedged in between support and resistance. GDX has trendline and lateral support in the $31s with key resistance in the low $34s. GDX has immediate support at $22 and strong support at $21 while initial resistance is at $23. If gold is to have another chance to breakout in the months ahead then GDX and GDXJ need to surpass their April highs.
While we are concerned about gold for the remainder of 2018, it could be setting up for a summer rally – especially if it drops to strong support around $1265. Sentiment would reach even more encouraging levels and that, coupled with strong technical support, could produce a rebound. In the meantime, we continue to focus on and accumulate the juniors that have 300% to 500% return potential over the next 12 to 18 months.''