This is the key to the gold and silver markets.
June 9 (King World News) – Jesse Colombo: The chart below shows the U.S. Dollar Index, which as I frequently explain has been trading in a range over the past year between support at 96 and resistance at 100. Friday’s jobs report sent the index back up to test that 100 resistance level, which it has now tested seven times over the past year, failing to break above it each time before pulling back.
I am now watching closely to see whether the Dollar Index will once again fail at the critical 100 resistance level or finally break through it. If it fails and turns lower, that should provide a boost to commodities and precious metals, but if it breaks through decisively, it would likely put further downward pressure on them, at least in the short term. For that reason, the Dollar Index remains a key focus.
Now let’s take a look at where precious metals and the mining sector stand, starting with gold, which leads the overall complex. In line with the broader financial markets, gold fell 3.3% on Friday after several quiet weeks of moving sideways.
Gold’s latest decline pushed it below the 200-day moving average, but I don’t put much weight on that alone, as I’ve often seen similar moves quickly reverse with the price climbing back above it. I place far more importance on the slope of the 200-day moving average when assessing the trend, and in gold’s case, it is still sloping upward, which is an encouraging sign.
What is more concerning is when an asset is trading below a downward-sloping 200-day moving average, as that signals a bearish bias—but that is not the case for gold at this time.
Gold has now spent roughly three weeks at oversold levels according to the Williams %R indicator, which often creates the conditions for a rebound when it occurs within an uptrend, as indicated by the upward-sloping 200-day moving average. That said, I would not try to catch a falling knife until it is clear that the selloff has exhausted itself and that gold has found solid support, which I’ll discuss next.
As for the key support I’m watching in gold, it is the $4,300 to $4,600 zone, which formed at important peaks and lows over the past eight months. Friday’s decline pushed gold to the lower end of that zone, though it’s worth noting that several rebounds have occurred from this same area. Ideally, I would like to see that happen again.
If gold were to close decisively below $4,300, thereby breaking down through this support zone, I would adopt a more cautious stance for those engaged in short-term trading. That said, I firmly believe gold is still in the early stages of a long-term secular bull market, and that the correction which began in late January is simply a routine pullback of the kind that occurs in every powerful bull market.
Moving on to silver, it fell 8.27% on Friday but managed to close just above its 200-day moving average, which is still sloping upward. Silver has also been oversold for roughly three weeks, a condition that often sets the stage for a rebound when it occurs within an uptrend.
That said, as with gold, I would avoid trying to catch a falling knife until it is clear the selloff has exhausted itself and that silver has found solid support, which I’ll explain next.
The key support to watch in silver is the $60 to $70 zone, which formed at important peaks and lows over the past seven months. Friday’s decline brought silver back into the upper end of this zone, an area where several rebounds have previously occurred, and ideally I would like to see that happen again.
However, if silver were to close decisively below this zone, I would take a more cautious stance for those trading in the short term. That said, I believe silver is still in the early stages of a long-term secular bull market, and that the correction which began in late January is simply normal behavior following the sharp gains of 2024 and 2025. It may not be pleasant, but this too shall pass.
Gold & Silver Takedown
To listen to Alasdair Macleod discuss the gold and silver takedown and exactly what he would be telling his clients to do if he was still a broker CLICK HERE OR ON THE IMAGE BELOW.
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