Silver prices | Gold And <b>Silver Prices</b> – June Lows Again Start Of Long Rally <b>...</b> |
| Gold And <b>Silver Prices</b> – June Lows Again Start Of Long Rally <b>...</b> Posted: 20 Jun 2014 06:47 AM PDT This article was submitted by Peter Degraaf who is an online stock trader with over 50 years of investing experience. He produces a daily alert for his many subscribers. To view a recent report please visitwww.pdegraaf.com or request a report at itiswell@cogeco.net The first, chart courtesy www.seasonalcharts.com, shows the historical trend of the price of gold, based on 30 years of data. Once the doldrums of June and July are out of the way, price usually rises until January-February. The challenge is to catch the June lows. The next chart by the Federal Reserve Bank of St. Louis shows the total amount of debt in the USA is now 60 trillion dollars. This cannot possibly be paid off, and it will be inflated away. Gold and silver will benefit. "Gold, unlike all other commodities, is a currency…and the major thrust in the demand for gold is not for jewelry. It's not for anything other than an escape from what is perceived to be a fiat money system, paper money, that seems to be deteriorating." Next we look at the Monetary Base having just topped the 4 trillion dollar level, and it does not reflect any 'tapering'! Instead it shows the US Monetary Base has increased from 800 billion dollars to over 4 trillion dollars in just 5 years. This new money has inflated the bond market and the stock market, and soon a lot of this money will find its way into the precious metals sector, as price inflation motivates investors to seek protection from 'asset destruction'. The following chart (released on Zerohedge) shows someone making a gold purchase of almost half a billion dollars early on Thursday June 19th. Sometimes 'they do ring a bell!' Based on the chart from www.Ingoldwetrust.ch it appears that custodial gold stored at the Bank of England fell by 755 tonnes in 2013. This proves the demand for physical gold is greater than mine supply can meet. This chart courtesy BLS and CNSNews.com shows the food index at BLS has just reached a new all-time high at 252.8. The index rose 7.7% during the past 12 months. Looking at the price of PHYS the Sprott gold trust, it appears that PHYS is breaking out at the moving averages. A close above the green arrow will turn the trend bullish. The 3 supporting indicators are positive. The Stockcharts.com chart below shows TIP the bond fund that is indexed to inflation. Investors in TIP seem to know when price inflation is on the horizon. Historically, whenever TIP breaks out after a pullback (as now), the price of gold (top of chart) begins to rise! Once again TIP is setting the example for gold to follow. Let's move on to Franco-Nevada's weekly price chart. In January we drew attention to the fact that the 13 week exponential moving average had crossed over and risen above the 34 WEMA, thereby issuing a buy signal. Last week price broke out above the 3 month old downtrend line, while the two moving averages remained in positive alignment. This is a very bullish signal. The supporting indicators (SIs) are positive, including the A/D line which turned up even before the January buy signal. Since FNV is a royalty company, it is useful as a leading indicator for the mining industry. Looking at the Stockcharts.com chart for the GDX gold and silver producers, it appears the ETF has broken out at the downtrend lines. The supporting indicators are positive, including the important A/D line. We await the breakout at the green arrow. This will confirm an 'inverted head and shoulders' pattern, with a target at 36! This chart courtesy Stockcharts.com shows the US dollar ETF is dropping below the most recent support line. The supporting indicators are negative. Almost always, the US dollar index moves in the opposite direction to gold and silver. The following chart from www.goldmoney.com shows 'managed money' (mostly hedge funds), is short the largest number of contracts since at least 2006. These positions have to be covered, when the price of silver begins to rise. From a contrarian perspective this is a very bullish chart. Featured below is PSLV the Sprott silver trust. Price is breaking out at the bullish falling wedge pattern. A close above the green arrow will turn the trend bullish. The 3 supporting indicators are positive. The premium over bullion is a positive +2.0%. Our thanks to www.nowandfutures.com for the quotes used in this article. DISCLAIMER: Please do your own due diligence. Peter Degraaf is NOT responsible for your trading decisions.  |
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