Still forming a base

Gold, silver and GDX are still in the process of forming a base, and the U.S. dollar index is probably in the process of forming an intermediate-term top.

GOLD (daily)

Upside: Gold made a higher low on Tuesday. MACD has made 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 continues to respect the Fib 50% level as resistance. The 50-day MA is close to making a bearish cross over the 200-day MA.

Support: Tuesday's low around $810; round number at $800; Fib 61.8% retracement level at about $798; bottom of channel, a little below that.

Bottom line: Gold appears to have made a small inverted head and shoulders with a neckline at the Fib 50% level. It would be bullish, with a target of over $900, if the yellow metal managed to break through this resistance; conversely, a failure of the formation would be bearish.

SILVER (daily)

Upside: Silver made a higher low and a hammer-like candlestick on Tuesday. MACD has made a bullish crossover.

Resistance: Round number at $14; bottom rail of blue channel.

Downside: Resistance at its previous low from earlier this month and the round number at $14 is holding silver back. The 50-day MA has made a bearish cross over the 200-day MA.

Support: Tuesday's low around $13; this month's low at $12.31.

Bottom line: Silver may be making a bullish ascending triangle. It needs to break through the resistance around $14 soon, or else the formation will fail, which would be bearish.

GDX (daily)

Upside: GDX bounced neatly off the bottom rail of its blue channel after filling the gap around $37.

Resistance: Next blue line, a little above $39; former double bottom at $41.61; falling 50-day MA at $42.58.

Downside: RSI and MACD-Histogram are flattening out.

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

Bottom line: GDX may fluctuate between the bottom two blue lines before resuming its rise.

U.S. DOLLAR INDEX (daily)

Upside: The index managed to make a higher high on Tuesday. The 50-day MA looks poised to make a bullish cross over the 200-day MA.

Resistance: Tuesday's high at 77.62.

Downside: The last three days have seen long-tailed candlesticks similar to the bearish hanging man. RSI is showing a bearish divergence. MACD may be making a bearish crossover.

Support: Upper rail of green channel.

Bottom line: The bottom panel of the chart, in which the purple line is the inverse of the dollar index, shows that gold fell in lockstep with the rise in the U.S. dollar from mid-July to mid-August, but the yellow metal has begun to pull away slightly over the past week, remaining steady as the dollar rises. If gold continues to rise, it won't be long until the dollar will start to fall to close the gap between the gold and purple lines, as it did in February and the first half of March.