As we now move into the 2nd quarter, the updated chart of the XAU/Yahoo advance/decline line drives home the point that the rally in gold and silver had very little underlying support by the PM stocks, and because of this, a double top formation in gold is likely to be triggered from current levels. Expectations from here would be for a minimal downside target for gold to the $1180 level, but with the perceptive break of the December lows seen on the A/D chart this past month, along with the current "rolling over" weakness seen in this same chart, it wouldn't be too surprising if we also see a challenge of the $1130 level before the next update on April 28th.
Well...that forecast turned out to be a big fat fail as the price of gold continued to strengthen into the middle part of April before easing back for the last week or two, in what appears to be, an obligatory snapback to what was the previous highs seen in late February.
This month's update gives a different view of things with the Precious Metals McClellan Summation Index showing that it found zero line resistance during the recent divergent run up in the price of gold, and it's now trending, once again, to the downside. It will now take a break below the previous MCSUM lows seen on the chart in order for the current rising trend in gold prices to be violated. With interest rates continuing to trend lower, this is helping to keep this same rising trend in gold intact, but with traders continuing to question these best of intentions, it's probably better to avoid the long side until we see a better undertone in capital investment.