Gold and dollar still in their channels

Gold has been showing strength, and the U.S. dollar, weakness, but both are still trading within channels that could eventually resolve into a bull flag for the yellow metal and a bear flag for the dollar index.

GOLD (daily)

Upside: Gold has surmounted its 50-day MA. RSI is back above 50. MACD has made a bullish crossover.

Resistance: Top of thin blue channel at around $920.

Downside: No clear indication.

Support: Falling 50-day MA, currently at about $895; rising 200-day MA, currently at about $860.

Bottom line: If gold manages to break out of the thin blue channel at around $920, it will have formed an inverse head and shoulders, with bullish indications for the yellow metal. We'll have to wait and see whether that happens.

SILVER (daily)

Upside: Silver has surmounted its 50-day MA. RSI is back above 50. MACD has made a bullish crossover.

Resistance: Magenta line; top rail of thin blue channel at around $18.10.

Downside: Long uptails on Thursday's and Friday's candlesticks. RSI appears to be rolling over.

Support: Falling 50-day MA, currently at $17.17; bottom rail of thin blue channel; rising 200-day MA, currently at $16.11.

Bottom line: If silver manages to break out of the thin blue channel at around $18.10, it will have formed an inverse head and shoulders, with bullish indications for the white metal. We'll have to wait and see whether that happens.

GDX (daily)

Upside: No clear indication.

Resistance: Falling 50-day MA at $45.94; rising 200-day MA at $47.23. Plenty of overhead volume above $45.

Downside: Weak volume on the bounce to close the gap. The bearish crossover of the 50-day and 200-day MAs could hold GDX down. RSI appears to be rolling over.

Support: This month's low at $42.70; double bottom at $41.61.

Bottom line: The gold miners, which traditionally lead the yellow metal, are looking weak.

U.S. DOLLAR INDEX (daily)

Upside: No clear indication.

Resistance: Top rail of green channel, currently at about 74.7; top rail of blue channel, currently at about 74.9.

Downside: The index failed to reach the top rail of its green channel before declining. RSI is back below 50. MACD is making a bearish crossover.

Support: Rising 50-day MA at 72.8, bottom rail of green channel, currently at about 72.3.

Bottom line: If the dollar index breaks down from its upward-sloping green channel, a substantial decline would be indicated. For the time being, it's still trading within that channel, so we'll have to wait and see.