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Gold Breaks Its Flag…

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We've been reluctant to get back into the miners of late.

Another real shakeout that offered a buying opportunity without chasing failed to show up.

At the same time it's been tough to tell if the recent sideways move has been a bullish consolidation of distribution.

I have been keying off two miners for guidance: AG and AEM.

Earlier this week we flagged AG's reversal, indicating it looked like it had work to do.

AEM tailed back up from a flush of its 20 day on Wednesday along with GDXJ, but both may be set for a close back below their 20 days on the important Friday weekly closing basis.

One concern has been the unimpressive performance in gold and the miners with recent dollar weakness.

However, with the dollar at pivotal potential support here, a turn up in the dollar could see gold and the miners get hammered:

Gold is getting hit this morning and a decisive down Friday could spill over into Monday.

Notably GLD has not kissed its 50 day since June 23.

That may be on the table if we see downside follow-through.

That said, I remain ultimately bullish on gold and am looking for a pullback on the weeklies as an opportunity.