Silver, GDX Needs To Hold These Levels To Carve Out A Bottom - Technical Analyst
(Kitco News) - The precious metals market is facing an important technical inflection that could be an indicator of how much more pain investors are in for, according to one technical analyst.
Avi Gilburt, creator of Elliott Wave Trader, said in an interview with Kitco News that he is watching market sentiment in the gold sector through the VanEck Vectors Gold Miners ETF (NYSE: GDX) and all indications point to lower prices in the near-term.
“Once we broke September support, that gave us a warning that it is going to take months to resurrect another major breakout attempt,” he said. “So, we expect a significant amount of weakness.”
Gilburt said that he is watching the $21 level very closely. GDX settled Thursday at $21.65 a share.
“As long as we can hold over the $21 region, then maybe we are closing in on a bottom,” he said. “If we break the $21 region strongly, over the next week or two, then the market is not likely going to bottom until GDX falls to around $17 region.”
Looking at silver, Gilburt said that the metal needs to hold $15.60 support, if a strong rally is going to materialize.
“If $15.60 breaks then we could see significant downside in silver,” he said.
March silver futures settled the day $15.80 an ounce, its lowest level since early-July.
Unfortunately, even if the price does manage to hold support, Gilburt is not expecting to see a major trade opportunity. He said that he would need to see prices push above $24 before a breakout trade materializes.
“The earliest I would expect any major breakout above the $26 region would likely be sometime in March,” he said.