Gary Tanashian presents very good technical overview of the Gold and Silver markets after the recent move.

What Is Our Money And Why China Plans To Move To A Gold Backed Yuan Currency.

"This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Alan  Greenspan  1966. "Gold and Economic Freedom" 

Kitco:

Precious Metals Must Make a Stronger Statement Still

Tuesday July 23

Yesterday was an impulsive looking move and something of a statement in itself.  But now technically, the metals and miners need to gather themselves (after a potential pullback on profit taking) and make a real statement.

Yesterday was the booster stage (gap up), and another leg up from here would give the precious metals complex the velocity to do some real damage with respect to upside targets.  That is because important resistance zones are now at hand.  While a pullback would be normal, gold bugs obviously do not want to see a terminal velocity situation where yesterday’s momentum erodes beyond normal profit taking.

As we have noted in NFTRH, gold has significant visual and moving average (50 day) resistance at and around 1350.  The relic always was going to at least pause at this level.  Now the real work comes in.  Volume, for the ferocity of the price rise, was not inspiring.

Silver’s significant resistance starts coming into play at 21.  It must break the flag to the upside and challenge one of the two noted resistance levels.

HUI did break a flag of its own yesterday, which was something we wanted to see.  That after an ongoing bullish divergence by daily MACD.  Notably, HUI popped over the 50 day averages for the first time during the post-October bear market leg.  So, are the miners leading?

Well, they are making a move to do just that by rising above the 50 day averages and breaking a trend line in relation to both gold (top) and silver (bottom).  This simply must be maintained, no ifs ands or buts, for the precious metals complex to continue looking prospective for upside targets.

There is much more to the picture than the above charts, however.  It is simply vital to track gold’s relation to assets that are positively correlated to the global economy.  That is where the real work takes place in understanding precious metals macro fundamentals, and these signals – which also got a boost yesterday – must remain on track for the rally to attain significant targets and/or morph into a new bull market phase.

Gold-Oil, Gold-Commodities, Gold-Stock Market, etc… That is all the geeky stuff that NFTRH will continue to do on a weekly basis so that we can define what is in play every step of the way.  If the ‘real’ price of gold rises, then we’ve got something cooking – and not just for the precious metals.  The implications would spread out to the entire macro environment.  So watch everything, not just nominal gold, silver and HUI.

By Gary Tanashian
http://www.biiwii.com"

Gold miners GDX: break out above MA200 - Bull is back! GDX, HUI, XAU, AUY, TNR.v, RMK.v, AMM.to, BTT.v.

Finally Gold Miners are back into official Bull stage above their MA200. Technically it is very strong picture. GDX is breaking up after third retest of recent highs, STO is positive, MACD is turning up in a Buy cross over, RSI is confirming new highs.

Gold Miners are following gold this time and breaking up only now. We are in a position to see the change of leadership and important move up in GDX.

Gold challenging old highs is an indication that recent Irrational Delusion with strong US Dollar and Treasuries as a Safe Heaven is a minor historical aberration of a normal people' madness and that effective market theory can not stand test of a real life. Gold Miners are facing higher underlining Gold prices and lower cost with suppressed oil and commodities prices. It is time to raise capital as they are doing, but not because we are at the "important top", but because their future in the form of resources which now belongs to another companies are at the Important Low. M&A is the only way to survive and not become a prey. Companies are mining today grades which before 2000 were considered not more then dust. They need new projects to avoid production cuts due to lack of reserves. Here where Canada Venture CDNX and Juniors will come back into play.

Gold Miners GDX are in a Break Out.

After months of suppression with all broader equities Gold Miners GDX suddenly remembered on Friday that they have been waiting all these years for Disaster to come and to be a protection, store of value and even new wealth creation in times of Debasing of Empire and its currency US Dollar. GDX has rallied 27% on Friday. What happened? We have discussed already that Gold is screaming on its charts. Gold Miners have rallied Friday even with US Dollar flirting with new highs. Downtrend line is broken to the upside and potential overtake of MA50 is in the picture. Largest Gold producer Barrick Gold ABX has rallied more then 30% in one day. We are closer to a point when direction of US market will be irrelivant for Gold miners or even better: its dimise will fuel rise in Gold, Silver and Miniers. Because of artificial US Dollar rally and pending collapse of Treasury Bubble Gold is positioned to overtake recent highs in a very bold action and fuel new rally in its Miners. Watch further developments in Royal Gold RGLD early warning Gold indicator of future move. Total value of all mining companies represented by HUI Gold Bugs Index is still below 100 billion dollars, one Google GOOG was much bigger then total sector in its Happy days. We need just 1% of total value in equities to ignite the sector to the new highs. Recent Deflation Fear and following Deleveraging have damaged the sector, Supply side is struggling and Gap will be huge with rising Demand driving the prices Up. Situation with a small brother Silver will be even more explosive, with recent cuts in production in Zinc and Copper mines and hundreds of projects put on shelves Supply will never come at this price level as a majority of Silver is mined as a By Product of Zinc and Copper mines.

GDX, SSRI, SLW, AUY, ABX, MGN, SST.v, OK.v, TNR.v, BVG.v, MAI.v.

Gold Bugs Index HUI - No bugs left? Watch the butterflies! SSRI, SLW, AUY, GDX

Picture is muted here. Two Left shoulders are much higher of the potential Head at 150.27. Danger here if the Gold will slip from Bearish Flag with US Dollar breaking up we can retest 150 area. I will not count on this: if the pattern will go as we have discussed in USD, VIX, DOW we will have fast shoot up above 250. Friday close above 200 is important, PPO is at Buy cross. With two Right Shoulders to be formed at above 227 and 250 we will have very strong reversal.

Amex Gold Bugs Index HUI and Dow relations during Last Dot.com Bubble. Gold shares are still in a Bull Market.

Few interesting observations: HUI is still up from its Low 36.01 (!!!) in late 2000 more then 589% at 248.12 at this Friday close. Emotions will let you think that everything was collapsing in the same irrational fashion moved by Fear with its indicator VIX as high as 76.94 on Friday afternoon. But from chart above you can see that Gold miners HUI are still in a Bull market, testing strong support at 200-250 area and performed a Double Bottom on a daily chart. So far Goldies HUI has given up from its high 514.89 (total increase of 1330%!!! from its Low in 2000) 52% of its incredible gains. With General Equities represented by Dow the situation is very much different: recent sell off has wiped out almost all gains from its last Low at H&S bottom formation around 8000 after Dot.com Bubble burst in late 2002. Now you can see why it was so important for PPT (Plunge Protection Team) to defend 8000 level and they smashed shorts into covering in late Friday afternoon. (That piece was written in middle of the day on Friday, they must be reading my Blog now, I do not mind: Guys please stop messing around and let the US Dollar go, leave a message and even I will tell you how to bring Gold into the Honest money again. Question is who would like or can afford to be Honest these days?) It is the last chance to keep Dow Paper Bull running in Equities with painting Double Bottom on multi year chart with Lows around 8000 mark. The question is that the real value is slipping away with US Dollar losing its ground. Gold value of Dow in 2002 and in 2008 at the same 8000 level are too very different things.

I am very cynical and biased here, I went long last week at my maximum and cut all my Put protections from downside. I am 100% Long for the first time in last five years. So I am eating my own bread as usual. Even my fellow Google GOOG deserve a break now from my accusation on overvaluation. Possibility of a powerful rally even in General Equities is too high to be greedy on picking the last 10-20% from the downside. You can not manipulate markets forever and charts above are the best confirmation. Bull is a Bull in Goldies HUI and painted Paper Bull in Dow is at the life support.

Next drama will be unfolded in The Treasury Bubble: all lemmings (this time professionals) are there sitting at the cliff. Once patient (world financial system) will be pronounced more alive then dead and Risk will come back into play, "Risk Heaven" of Treasuries "backed" by more then 10 trillion debt and coming Paper for financing all these bailouts will collapse. Tripple AAA rating of USA Treasuries is backed no more then Trust and it will never come back. Last Friday action was really astonishing with Equities collapsing, Treasuries were sold as well, Gold and Silver were trashed to give more legs to Dead Cat bounce in US Dollar.

On the charts above picture is telling more then thousand words. Goldies HUI were panished by Fear during initial sell off after Dot.com collapse, but bottomed in late of 2000 and never looked back. Dow on the other hand was making low lows until late 2002. Incoming flood of liquidity will bring Gold shares value back in line with underlining commodity and then they will finally decouple from misery of over leveraged financial economy build on borrowed time. This time is over.

Some initial ideas how to play this coming collapse of Treasury Bubble for your study.

P.S. I have one follower now! Who is it? Is it Ben or Hank? Guys I have a nice landing spot in my garden, send me couple of choppers, please. I will give you discount from my gold mines when you will come back to Gold Standard.

DIA, SPY, QQQQ, HUI, XAU, CDNX, SLW, SSRI, AUY, RGLD, ABX, NEM, GG, SST.v, TNR.v, CZX.v, SAX.to, OK.v, FVI.v.

Amex Gold Bugs Index HUI previous Low Holds during waterfall.

We have a good chance to make a double bottom if previous Low at 234.35 will hold. Friday was just a waterfall dumping of all positions. PPT tried hard to bring markets into positive close last Friday as I have wrote in the middle of the session. DOW 8000 is the line in the sand and 0.82 is a crucial for US Dollar. Gold and Silver were trashed to make the Us Dollar rally more legs. Something coming on over the weekend. Rate Cut and more money pumping as Interbank Guarantee comes to mind. ABX, NEM, RGLD, AUY, SSRI, SLW

Amex Gold Bugs Index HUI is bottoming out.

We have important divergence on PPO Gold Mining companies are not hitting new lows with DOW, S&P 500 and Nasdaq hitting new ones.

Amex Gold Bugs Index to Gold Ratio at its low.

All Gold Miners were thrown out with general equities: the difference here is value - at current Gold prices they are printing money. With Greed coming in instead of Fear Index could double with Gold price holding at this level. SSRI, SLW, AUY, NEM, ABX, AEM.

Gold Bugs Index HUI Break Out after retesting resistance