GDX - lousy end to the week

With Gold and Silver seeing overnight gains flip to declines, the Gold mining sector saw significant weakness across the day. GDX declined by 3.2% @ $29.61. Near term price formation looks like a bear flag, with strong resistance at the old support in the upper $33s.


GDX, daily

GDX, monthly

Summary

Even if GDX can manage a few more days higher next week, it faces severe problems. There are two key gaps to be filled - as is also the case for GLD and SLV, with massive resistance at the old support in the 33s.

I find it near impossible to believe GDX can break above 33s. Even more critical to recognise is the old declining trend (from Sept' 2012) - now in the $38s.

If the main equity market rolls lower into May, - along with renewed weakness in the Gold and Silver commodity market, then GDX looks likely to take out the recent low in the 27s.

First downside target is 25, but 20s seem possible if the precious metals market sees another major wave of destruction in May/June.