Barrick Gold was downgraded this morning to sector perform by some of the "analysts" citing concerns over delays and cost escalations at new mines under construction. Tie that in with weakness in both gold and silver, which ran into long liquidation and some fresh selling after failing to better the chart resistance levels noted yesterday, and that has resulted in the HUI sinking down to the bottom of a critical support level on the price chart once again.
The gold shares in general are becoming dogs that cannot hunt or in the case of some, not even bark.
The same hedge funds that have been buying them down at this level late last year and early this year had better not have a change of heart. Still, it is only Tuesday so they do have time to recover before the end of the week. They will certainly need to or we are going to see a technical chart breakdown.
Pressure in gold and silver today is coming from a slightly stronger Dollar and some increased chatter over Greece and woes associated with that running sore. Traders are a bit hesistant to get too aggressive on the risk trades as a result and are exercising a bit of caution. That is allowing for some long liquidation and fresh short sellers from top pickers.
Silver stills need to get a solid close ABOVE $32.50 to avoid sagging here while gold needs to close over $1680 to avoid a setback towards $1650.
Bonds, a good measurement of the willingness of traders to take on risk, are basically flat today reflecting the lack of conviction either way for today's session. We'll see what we get in tomorrow's session which should be more telling as to where we might head next.
Note on the following HUI chart that all of the major moving averages are trending lower. We need the shorter term ones to at least stop heading lower and flatten out if the HUI is going to attract any sort of momentum based chart buying in the gold sector.
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