Strength returns to gold

In the strongest up day for gold since February, the yellow metal launched off the bottom rail of its channel for a gain of $26.10 on Friday, closing at $824.70. RSI has risen convincingly above 50, and the MACD histogram is rising rapidly.

Gold looks set to test its recent high of $848, which coincides with the top of its channel, within a few days.

Silver rose less dramatically on Friday, peeking just above its broken trendline. Resistance around $14.70 appears to be holding silver back, although RSI has climbed back above 50 and the MACD histogram is rising gradually.

If silver manages to clear the psychological barrier at $15, it is likely to attempt a retest of the recent high of $16.27, near the top of the channel.

GDX also showed strength on Friday, gapping up at the open and closing at $48.85, its high of the day. It now faces Fibonacci resistance around $49, although RSI is back above 50 and the MACD histogram is rising rapidly. Note that the volume on Friday was less than half the recent average, so too much stock shouldn't be placed in that day's action.

The gold-mining ETF is clearly outperforming a very weak S&P 500 index. The GDX:$SPX ratio's RSI has bounced off 50, and the MACD histogram is rising steadily.

The U.S. dollar index plumbed fresh depths on Friday but managed to close at 75.04, just above its recent low. $USD formed a bullish doji candlestick resembling a hammer, which often heralds a change in trend. RSI remains below 30, however, and MACD is making a bearish crossover.