Are you feeling lucky? We all should. Whether you’re short or long gold (or you’re waiting on the sidelines), the additional day of signals is truly a blessing. That is, if you know what to look at. The previous days and weeks provided us with multiple signs and yesterday’s price action served as the – likely final – sign before the big price move. Were you listening?

Let’s start today’s analysis with something that we didn’t feature so far this week – the short-term look at the gold stocks to gold ratio (chart courtesy of http://stockcharts.com).

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After moving back and forth close to the February intraday low, the gold stocks to gold ratio simply… Broke and closed below it. This may seem like an insignificant event from the day-to-day perspective as the ratio moved down just a little. However, the fact that it was a first decisive move below the previous February and March lows makes it important indeed. The dam was broken in early February when the ratio moved below the 2017 and 2016 lows. Now we have seen a sign that the post-breakdown consolidation is over and that the decline can continue. The implications are bearish for the ratio and for the entire precious metals sector.

Gold Confirmed Its Breakdown

Gold just closed below the rising support line for the third consecutive trading day, which is a classic way of confirming a breakdown. The implications are therefore bearish, and it seems that gold is about to decline in the way that we described previously.

In our Monday’s analysis, we discussed the analogy to the “triple top and the one extra pop-up” by writing the following:

First of all, the 2012-2013 decline and the 2016 decline have both started in the similar way. Similarly to what we recently described in case of the euro, gold formed a triple top (each top being below the previous one) that was followed by an extra move up.

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