I have read in many places on the Internet that the metals have certainly broken out.  But, as you know, I am not quite convinced. Now, that does not mean I am bearish. It just means I still think there could be more downside seen before a true breakout is seen.

As I have been noting for the last few weeks, silver has been providing us with the clearest of the patterns. And, last week, I noted that, under both patterns, silver still looks like it needs one more push higher before it is going to make its decision. This past week, we got our push higher to complete what is best counted as a 3^rd wave off the March lows. But, as we know, 3 waves up does not constitute a bullish trend. Rather, we need 5 waves up to complete. 

Once silver completed its 3 waves up this past week, it had an abrupt drop right into our support region. And, what silver does in the coming week with this support region will tell us if we are going to re-test the March lows, or if we are going to complete 5 waves up. But, remember, even in the case where we get 5 waves up, we still will likely see another consolidation in a wave 2 pullback, which can take several more weeks. So, even based upon silver’s most bullish pattern, I don’t think we see a true breakout until at least May. But, should we break below the support region for a c-wave lower, this may be the last good buying opportunity you may see in this complex.

I think the GLD provides the same perspective as silver. Take note that the GLD did spike just over the resistance noted over the last few weeks, but came right back down below it. Moreover, the spike over resistance was not completed in 5 waves, but was a rather clear 3 wave move. Therefore, I do not classify this as a strong indication that a break out has occurred. In fact, if you look at the micro count, we have the potential for a 5 wave decline off that spike high. So, as it stands right now, I have no strong indication that we have a full 5 waves up off the March lows in GLD either. However, if GLD can muster a higher high next week, then I may be able to fashion a 5 wave structure of the March lows, similar to silver.