PRECIOUS METALS BOUNCE BACK FROM YESTERDAY'S SELLING -- AND REMAIN ABOVE SUPPORT LEVELS -- THE FED'S NEW PATIENCE ON INFLATION SHOULD BE GOOD FOR GOLD AND SILVER

GOLD SPDR HOLDS SUPPORT... My Wednesday message showed precious metals and their miners pulling back to underlying support levels within major uptrends.   That's still the case.   My message from yesterday described profit-taking in those same precious metals following an upside spike in bond yields after the head of the Fed suggested a more patient attitude on inflation.   I'm coming back to them again because precious metals are bouncing back nicely today from underlying support which is an encouraging sign for them and their miners.

Chart 1 provides a closer look at the Gold SPDR (GLD) which pulled back yesterday to its early August low.  The good news is that GLD is bouncing off that earlier low today.   The rising brown line on the chart is a rising trendline drawn under its March/June lows which was shown on Wednesday; while the blue line shows its 50-day moving average.  It's also encouraging to see its 14-day RSI line in the upper box finding support near the 50 level.  The point of the chart is simply to show that the underlying support levels on the chart appear to be holding.

Chart 2 gives a closer look at the VanEck Vectors Gold Miners ETF (GDX) which is rebounding from its 50-day moving average (blue arrow) and early August low.   That's another sign that support is holding.

SILVER ISHARES STILL IN PENNANT FORMATION...The daily bars in Chart 3 show the Silver iShares (SLV) still in coiling pennant formation described on Wednesday which is characterized by two converging trendlines.  Today's rebound puts it close to an upside breakout.  Pennant formations are usually continuation patterns which favor resumption of the market's underlying trend which for precious metals is up.

The daily bars in Chart 4 show the Global X Silver Miners ETF (SIL) bouncing further off its August low  and a rising trendline drawn under its March/June lows which was shown on Wednesday.  It also remains above its 50-day average (blue arrow).   A close above last week's intra-day high near 50 would be an even more positive sign.

FED PATIENCE SHOULD BE GOOD FOR GOLD... As I suggested on Wednesday, precious metals and their miners appear to be in a normal correction/consolidation pattern within major uptrends.   And they appear to be holding those important support levels.   The Fed's decision yesterday to let inflation run a little hotter may have caused some initial profit-taking in precious metals (after a spike in bond yields and a rebound in the dollar).   It seems more likely, however, that the Fed's willingness to keep rates lower for longer in the face of rising inflation should be bullish for precious metals and their miners which usually do better in a more inflationary environment.