Gold Is Breaking Out; Goldman Stumped

Recently on CNBC, Goldman made its position on gold very clear:

  • CNBC: "You would fade this whole gold hike?"
  • Goldman's Jeff Currie: "Absolutely"

h/t @RudyHavenstein

Translation: "sell your gold to us" because as usual things are not working out quite as expected for Goldman's clients who listened:

 

And today BofAML's Stephen Suttmeier confirms the bank's constructive view on the precious metal, viewing the breakout above 1,201 as a significant reason to believe Gold may have formed a technical bottom on a longer-term basis...

Gold forms a technical bottom, breaks out of channel

The 61.8% Fibonacci measured move target and an extrapolated 200wk average align at 1,315 and is followed by a full measured move target of 1,375.

 

Silver makes a sputtering breakout

Silver also broke up through resistance provided by a channel and 50wk SMA, though it has since begun to reverse and did so in a less convincing way. Gold made the decisive breakout, not silver, and so we suspect gold may outperform silver overall.

 

And Suttemeier's shorter-term view confirms this...

Gold & Silver: Bullish from Bearish on tactical absolute & relative bottoms

For the first time in a long time, the Philadelphia Stock Exchange Gold and Silver Index (XAU) has broken out on an absolute and relative price basis to put in what appears to be a meaning bottom that is bullish for gold and silver mining stocks.

We will maintain this bullish view as long as the absolute and relative price trends hold above the weekly moving averages, which should provide support on pullbacks. Quite a few Gold and Silver stocks have had 90-day price and volume breakouts.