Gold and silver correcting

After hitting an intraday high of $931 on Monday, April gold fell back out of its channel from August on Tuesday. The bottom rail of the channel then served as resistance from Wednesday to Friday, but support was found at around $900. Gold closed the week at $906.10.

RSI and MACD continue to fall, so gold's decline may have some way to go. The 50-day MA, currently at $868.70 and rising, should provide initial support.

Gold may be in the early stages of a decline from the top of its long-term channel. Both the weekly RSI and MACD histogram are showing a bearish divergence, and RSI has fallen through 70.

March silver met resistance at the green line on Monday and Tuesday. On Friday, silver fell out of its channel from August to close at $17.12. Support was found at the purple line around $17, but the indicators suggest it will not hold.

Both RSI and the MACD histogram are showing a bearish divergence, and MACD has made another bearish crossover at a high level. The 50-day MA, currently at $15.75 and rising, should provide support.

After failing to close above $49 on Monday, GDX plunged below $47 on Tuesday. Support was found at the bottom of its (newly drawn) channel from mid-August, and the gold-mining ETF closed the week at $47.75, barely above its 50-day MA, which it has been hovering around for nearly two weeks.

RSI is neutral near 50, and the MACD histogram is rising gradually toward zero. GDX appears to be coiling close to the apex of a symmetrical triangle. If it manages to reach the upper edge, GDX could break out of the triangle. First resistance would then be around $52. If support at the lower edge of the triangle (and the bottom rail of the channel) fails, the breakdown could send GDX all the way to support at its 200-day MA, currently at about $43 and rising gently.

GDX appears to be a little less than halfway through a decline from the top of its (newly drawn) long-term channel. Both the weekly RSI and MACD histogram are showing a bearish divergence, and MACD has made a bearish crossover.

The gold-mining stocks may be poised to show some strength relative to gold. RSI has been rising from a low a little above 30, and MACD is making a bullish crossover, so it is likely that the GDX:$GOLD ratio will break out of the channel that has contained its five-week-long downtrend.

The ratio remains below both its 50-day and 200-day MAs, however, so it is possible that a breakout will lead to a trading range rather than a dramatic rally. And if gold continues to fall, a rise in the ratio need only mean that GDX will decline more slowly than the yellow metal.

The U.S. dollar index continues to coil within its symmetrical triangle. A breakout in one direction or the other should occur within a week or two.

RSI has fallen below 50, the MACD histogram is declining steadily, and MACD may be setting up for a bearish crossover. For now, the dollar seems to be headed for the lower edge of the triangle. If it falls through, next support should be at around 74.8.