David Fuller's view

These charts are related.  First, look at the Dollar Index, which has failed to maintain its recent downward break.  I maintain that this pattern since DXY initially completed its multiyear base formation in the second half of 2014 and rallied to 100 in March 2015, is a very lengthy consolidation following the first upward step of a secular bull market recovery.  The Fed will still want to restrain the Dollar, because in the upper side of this range, let alone should it sustain a break above 100 this year, it would once again become a strong headwind for the US economy.  

Gold is in the early stages of a bull market but has failed to maintain last month’s additional upward break, at least partly due to the resumption of a Dollar headwind.  The recent extremely bullish sentiment for gold is a contrary indicator, indicating how many people are long and leveraged.  A further retreat towards the rising MA would further correct a short-term overbought condition.  Alternatively, sideways ranging by gold while the rising MA gradually caught up would correct bullion’s overbought condition.

I have often referred to Silver as ‘high-beta gold’, meaning that it will outperform the yellow metal in both directions, more often than not, being a considerably less expensive ‘hard money’ proxy.  Silver’s retreat from $18 is correcting a short-term overbought condition and bringing it back into an incremental scale-down buying range between $16 and $17.

Platinum is also correcting a short-term overbought condition and approaching initial support near $1000, which is also close to the rising MA.  Interestingly, platinum has usually sold at a premium to gold but more recently has been trading at a discount of over $200.  Consequently, it may also outperform gold over the lengthy medium-term.