Gold price | <b>Gold Price</b> Bottom Targets $37.5 :: The Market Oracle :: Financial <b>...</b> |
| <b>Gold Price</b> Bottom Targets $37.5 :: The Market Oracle :: Financial <b>...</b> Posted: 09 Jun 2014 08:26 AM PDT
By: Clive_Maund
On its 14-year chart, which shows all of the bullmarket in silver from its inception, we can see that, although the drop from the 2011 peak has been severe, involving losses of more than 60% from the highs, it has not thus far resulted in a breakdown from its long-term uptrend, which remains intact. Over the past year silver appears to have been basing in the zone of strong support shown with its supporting long-term trendline gradually coming into play to provide additional support. This is in fact the perfect setup for a major new uptrend to begin, and the only further supporting factor required is a favorable COT structure - and that we now have.
On its 4-year chart we can see the retreat from the 2011 highs in much more detail. When the support at $26 failed in April last year the price fell hard before establishing a new equilibrium. Now, with a Descending Triangle apparently forming above a line of support near last year's lows, it looks at first sight like another such breakdown is about to occur. However, we have already observed that there is strong support at and not far beneath the current price, arising both from earlier trading and the long-term uptrend line coming into play, and when you add in to the mix that sentiment towards silver is now extremely negative, and that the COT structure is now strongly bullish, it becomes clear that further significant downside is unlikely before a new uptrend emerges.
Admittedly, the picture on the 1-year chart does not look encouraging - this is the third test of support near last year's lows, and on the 3rd approach, support often fails, furthermore, recent upside volume has been weak and moving averages are in bearish alignment. All of this suggests an imminent breach of the support - but what we have observed on the long-term charts and on the COT charts is telling another much more bullish story. One scenario therefore thought likely is that powerful forces break silver down below the support at last year's lows, triggering the stops clustered just below them, and then mop up the liquidated holdings of weaker players, the price only going on to drop a dollar or so below the breakdown point before reversing dramatically to the upside again to start the expected major new uptrend.
Turning now to the COT charts we can see the dramatic improvement in the COT structure on the chart below, with Commercial shorts falling to the sort of levels that prevailed ahead of the big rally last August, and the more muted but still significant rally of last February. Large Spec longs are now almost non-existent - they have "thrown in the towel" which is very positive sign indeed. This is a very positive COT structure indeed and the expected new uptrend could begin at any time, although we suspect there may first be a short-term drop, partly because gold's technical situation could still use some improvement, and partly because seasonal factors are not favourable this month.
The long-term COT chart below provides historical perspective with respect to how the Commercial short and Large Spec long positions have scaled right back in recent weeks. As we can see they are now at levels that must be construed as quite strongly bullish.
The chart for Public Opinion shows that it is now back in the basement, which is another important precondition for a big rally.
So, almost all the pieces are in place for a major rally in silver to begin soon, and the only factors that could use some improvements are the seasonal influences, which get better after this month, and gold's COT structure. If silver does break below last year's lows there is expected to be little downside follow through, and any such further short-term weakness will be regarded as throwing up a major buying opportunity in a wide range of silver investments. Finally it should be noted that such a breakdown may not now occur, given the big improvement in silver's COT structure to date. If we see any really big volume up days soon it will be a sign that the major new uptrend is beginning.
By Clive Maund For billing & subscription questions: subscriptions@clivemaund.com © 2014 Clive Maund - The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maunds opinions are his own, and are not a recommendation or an offer to buy or sell securities. No responsibility can be accepted for losses that may result as a consequence of trading on the basis of this analysis. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. © 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.  | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| <b>Gold Price</b> Lost a Nothing 90 Cents Today to Close at $1252.10 Posted: 06 Jun 2014 05:14 PM PDT
The GOLD PRICE lost a nothing 90 cents today to close at $1,252.10, but it's above $1,250. Way up above at $1,275 stands the 20 day moving average, first milestone that will prove gold has turned its face skyward. Really the gold price needs to rise above $1,280 where it broke down. $1,295 and the 200 dma would be better still. The RSI shows the gold price rising up from a severely oversold condition. Full stochastics have been as oversold as they've been in the last 12 years. MACD is trying to turn up. But all this must be confirmed by the only indicator that counts: higher price. The SILVER PRICE dropped 9.2 cents to 1896.3c, but traded most of the say above 1900c. As with gold price is the only indicator that counts in the end. For silver, that means climbing above 1950c, then over 2050c. Both silver and GOLD PRICES seasonally post lows in June-July, so we might see one spike move down. Everything is in place, however, for a reversal -- they just haven't reversed yet. If I told y'all that silver rose more than the Dow or the S&P500 last week, y'all would tell me I was lying and throw a pop bottle at my head, but just you look. Silver rose 1.7% this week but the Dow only rose a piddling 1.2% and the S&P500 rose 1.3%. Those are just the numbers. Gold rose 1/2% while the US dollar index stayed plumb pancake flat, didn't move ne'er a hair. Platinum rose only 30 cents. I reckon it makes a difference who writes the headlines. Which reminds me, who gets to pick the news? Did y'all notice that whatever some lamebrain in New York or Washington says is news is what they spotlight? Obama Administration is good at this, floating a new crisis every week as "news" when actually it's either "olds" or just their agenda. But the news from the yankee government was good today for Wall Street, the unemployment is steady and jobs have grown by over 200,000 a month for the last three months. Now if you all have never heard SHAMELESS LYING before you heard it from this lying report. I'm just a nacheral born fool from Tennessee, but I know to go to the St. Louis Fed's database Fred and look up Civilian Labor Force Participation and see that it's now at 62.9%, against a high in July 1997 (right, 17 years ago) of 68.1%. 62.9 is itself a level not seen since May 1978. Then I went and read what John Williams of www.shadowstats.com had to say. John is an expert in unravelling their statistical lies, and he says unemployment is closer to 23% and the gimmicks the Bureau of Labor Statistics uses overstate job growth by 200,000 a month. But welcome to America, where the truth don't count, only the illusion of an economy. Stocks rose again to new highs, the eighth out of the last 10 days for the S&P500. It rose 8.98 (0.46%) to 1,949.44. Dow rose 88.17 90.52%) to 16,924.28. Both have now poked through overhead resistance lines. They could break down here -- new highs on 8/10 days is not a sequence nature encourages -- or they could go wilder still, although both have reached overbought territory. But overbought can get overboughter still. The end lieth not far away. About now it's getting time to sell stocks and put the proceeds into silver and gold. The Dow in Gold today rose 0.59% to end at 13.51 oz (G$279.28 gold dollars), a new high for the move since March, but not nearly the high for the move, which remains 13.80 oz (G$285.27) last December. It's likely forming a double top here, but that has to be confirmed by a reversal. Dow in Silver gained 0.66% to end at 890.75 oz (S$1,151.35). It has bounced off its upper resistance line this week, but needs to drop through the 20 DMA (866.37 oz) to confirm a reversal. I don't expect it can get higher than 912 oz (S$1,179.15), and may have already turned. Wasn't a shining week for the US dollar index. Yesterday's announcement from the criminals at the ECB sent the dollar up first to 81.07, then it collapsed all the way to 80.39 Today it ended where it began the week, at 80.43, just above the 20 DMA at 80.31, but below the 200 DMA at 80.48. Has the dollar aborted its uptrend? I don't know, but watch 80.20, even 80.05, the 50 DMA. It ought to hold those if it aims to rise. Euro collapsed from 1.3993 in early may all the way to $1.3503 when it bounced back yesterday. Today it lost 0.13% to $1.3645. The enthusiasm spawned by the ECB's announcement it would inflate the snot out of the euro will wear off in two weeks at most, and it will commence sinking again. The yen continues to slide sideways, losing 0.11% today to 97.55, below all its moving averages. Yet the yen abideth still in the same range it hath inhabited since 2014 began, from 94.83 to 99.24. Nothing happening here. The 10 year treasury yield in the last week has been working to undo its breakdown in early May. Remember that suppressing interest rates is the key to the central banks' house of cards. Once the market takes control and starts raising rates, the central banks are cooked. Watch thos einterest rates for the first sign of trouble. On 6 June 1934 US President Franklin Roosevelt signed the Securities Exchange Act establishing the Securities and Exchange Commission so that wholesale fraud upon the American public could be supervised by government authorities. Next week I will be travelling so won't publish commentaries any day but Monday, unless I just have time and take a notion. Y'all enjoy your weekend! Aurum et argentum comparenda sunt -- -- Gold and silver must be bought. - Franklin Sanders, The Moneychanger © 2014, The Moneychanger. May not be republished in any form, including electronically, without our express permission. To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $3,130.00; silver's primary is up targeting 16:1 gold/silver ratio or $195.66; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold or 18 ounces of silver. or 18 ounces of silver. US $ and US$-denominated assets, primary trend down; real estate bubble has burst, primary trend down. WARNING AND DISCLAIMER. Be advised and warned: Do NOT use these commentaries to trade futures contracts. I don't intend them for that or write them with that short term trading outlook. I write them for long-term investors in physical metals. Take them as entertainment, but not as a timing service for futures. NOR do I recommend investing in gold or silver Exchange Trade Funds (ETFs). Those are NOT physical metal and I fear one day one or another may go up in smoke. Unless you can breathe smoke, stay away. Call me paranoid, but the surviving rabbit is wary of traps. NOR do I recommend trading futures options or other leveraged paper gold and silver products. These are not for the inexperienced. NOR do I recommend buying gold and silver on margin or with debt. What DO I recommend? Physical gold and silver coins and bars in your own hands. One final warning: NEVER insert a 747 Jumbo Jet up your nose. |
The public are now extremely bearish on silver, with a widespread perception that it is "done for", but as we will see, even if there is some further short-term weakness, the longer-term outlook for silver is very bright indeed.
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