Precious Metals and Miners: Here Comes the Throwback

Gold, silver, and their derivative miners are all coming in further today with the U.S. Dollar continuing to rally. 

Gold miners are still holding onto the lion's share of their rally beginning earlier this year. However, a prolonged consolidation now into the summer would be much of a surprise, especially if the Dollar takes advantage of an increasingly hawkish-sounding Fed. 

But the big picture is necessary to respect, given the day-to-day moves in the always-volatile precious complex can be frighteningly volatile. 

On the GDX (ETF for senior gold miners) weekly chart, below, the intermediate-term $23 level is in danger of being lost into the weekend.

However, that major $21.50 prior breakout level below (light blue line) is the main one I suspect which must be defended this summer, in order to keep the bull case alive and well for the second half of 2016. To be sure, a retrace or "throwback" to the prior breakout level is entirely normal--We just do not want to see the selling pressure and volume intensify now. 

Overall, there is not much evidence that the rally in metals and miners this year was for naught and is now entirely rolling over. However, patience is likely a necessary trait required before the next round of long setups materialize.

One viable scenario may be to now see a sideways, grinding consolidation in the complex into the seasonally-bullish September period before the group takes off again.