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Don't Walk, Run Away From Gold, Silver

Yamana Gold also significantly increased their dividend. At 26 cents per share, the yield is now over 1.5 percent. A falling tide lowers all boats, and the headwinds facing the industry should be considered before considering Yamana Gold.

The indices are falling too. Two principal Gold mining indices, Market Vectors Gold Miners ETF (GDX) and Junior Gold Miners ETF (GDXJ) have fallen far from their 52-week highs. Both Gold ETFs have bearish trending daily moving averages. Gold is not alone, other metals are falling too.

Maybe the most difficult choice is deciding which is worse, direct gold ETFs like GLD, the miners ETFs, or the miners themselves. Barrick, Goldcorp, and Newmont Mining's daily moving averages are in a free fall. By the close of trading in the week of June 22, Newmont Mining was once again broken below the 60-day moving average and Barrick Gold's price is well below the 60-day moving average. For trend followers, Newmont is the type of stock to short. It's no surprise that Barrick, Goldcorp, and Newmont's short interest, while low, increased in each of the last three reporting periods.

Silver, represented with the silver trust ETF SLV (SLV) is dropping for the same reasons as gold. All three main moving averages are trending lower, and I can't find a catalyst for silver prices to increase.

Silver is so weak, the price of SLV fell to new year to date and 52-week lows last week. SLV hasn't traded this low since 2010. The daily moving averages for SLV are trending lower, placing Silver squarely in a bear market. Lower highs and lower lows are by definition a bear market. When I wrote my last silver article, SLV was $28.50, and Friday it closed at $26.15. View moves higher as selling opportunities.

Lower demand for silver and gold jewelry, along with a lack of inflation (in dollars) is a perfect formula for lower metal prices. As long as the situation remains, expect gold and silver to continue falling.

Author does not hold a position in any stock mentioned.
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