Bottoming

Gold bounced smartly from the low it made on Aug. 15 and has run into recent support turned resistance. The gold-mining ETF is starting to outpace gold to the upside, which is bullish for the yellow metal. The long-term charts suggest that an intermediate-term low is being made this month, though the bottoming process could take a little while. Beyond that, the precious metals typically show seasonal strength in the autumn.

GOLD (daily)

Upside: Gold successfully tested the bottom rail of the blue channel. RSI has sprung out of the oversold zone and shows a bullish divergence. MACD is poised to make a bullish crossover.

Resistance: Fibonacci 50% retracement level around $843; middle rail of blue channel; Fib 38.2% retracement level around $888; the 200-day MA; the 50-day MA just above it.

Downside: The yellow metal respected the Fib 50% level in its first assault on it.

Support: Round number at $800; Fib 61.8% retracement level at about $798; bottom of channel, a little below that.

Bottom line: While it is conceivable that gold will retest its Aug. 15 low, it is more likely that it will make a higher low before mounting another attack on resistance in the $843-$850 range.

GOLD (weekly)

Upside: Gold bounced rather precisely off the bottom of its channel.

Resistance: Fibonacci 50% retracement level around $843; rising 50-week MA at $870.50.

Downside: The yellow metal respected the Fib 50% level in its first assault on it. MACD continues to fall.

Support: Fib 61.8% retracement level at about $798; bottom of channel, a little below that.

Bottom line: Gold could gyrate for a while between its Fibonacci 50% and 61.8% levels, as it did last fall, before making a sharp move.

SILVER (daily)

Upside: Silver made a higher low and a hammer-like candlestick on Tuesday. RSI has risen from the oversold zone. MACD has stopped falling.

Resistance: Bottom rail of blue channel; bottom rail of magenta channel.

Downside: Silver was rebuffed by resistance at its previous low from earlier this month and the round number at $14. The 50-day MA is poised to make a bearish crossover at the 200-day MA.

Support: Aug. 15 low at $12.31.

Bottom line: More work may need to be done before the bottoming process is over.

SILVER (weekly)

Upside: Silver bounced after barely penetrating its green uptrend line. RSI has reversed just shy of the oversold zone.

Resistance: Magenta declining-tops line.

Downside: Silver was repelled by the magenta line and round-number resistance at $14. MACD is still falling.

Support: Green uptrend line; rising 200-week MA at $11.74.

Bottom line: Silver could gyrate between the green and magenta lines for a while before making a clear move.

GDX (daily)

Upside: GDX has broken back into its channel and tested the bottom rail from above on Friday. MACD has made a bullish crossover.

Resistance: Next blue line, a little under $40; former double bottom at $41.61; falling 50-day MA at $43.21.

Downside: RSI has turned down.

Support: Bottom of channel; recent low at $33.86.

Bottom line: GDX may fluctuate around $37 briefly to fill the gap before resuming its rise.

GDX (weekly)

Upside: GDX briefly penetrated the rising 200-week MA before rising back above it. RSI has bounced from just above the oversold zone.

Resistance: Middle rail of green channel; former double bottom at $41.61.

Downside: GDX surmounted the middle green rail briefly but has fallen back below it. MACD is still fallin.

Support: Double bottom (green dotted line) at $41.61.

Bottom line: GDX needs to rise quickly above the middle green line, or else it may fall back below the 200-day MA.

U.S. DOLLAR INDEX (daily)

Upside: On Friday, the index recouped most of the sharp decline on Thursday.

Resistance: Area of congestion just above; recent high at 77.41.

Downside: RSI has fallen out of the overbought zone.

Support: Upper rail of green channel; flat 200-day MA at 74.19; breached downtrend line.

Bottom line: The dollar could easily retrace 50% of its recent steep rise from 71.31 to 77.41, which would bring it back near its 200-day MA and the previous high of 74.31.

GDX:$GOLD (weekly)

Upside: RSI dipped just below 30 into the oversold zone, then bounced from there.

Resistance: Bottom rail of channel.

Downside: MACD hasn't turned upward yet.

Support: Recent low.

Bottom line: The ratio of the gold-mining ETF to the price of the yellow metal may fluctuate for a while to form a solid bottom before re-entering its channel.