<b>Gold Price</b> Biggest Down Day of 2014 | Gold Silver Worlds |
<b>Gold Price</b> Biggest Down Day of 2014 | Gold Silver Worlds Posted: 14 Jul 2014 02:30 PM PDT The price of gold experienced today the sharpest price decline of 2014. Although it was usual to see these corrections last year, they have been scarce in 2014. Gold futures in USD closed 2.18% lower on the day while silver futures in USD declined 2.24%. The encouraging news for precious metals bulls is that gold and silver declined to the same extent. If silver would lead gold lower, it would have been worse. The hourly price chart shows today's waterfall decline. The gains built up over 3 weeks have been lost in a matter of hours. The daily price chart is shown below. Purely from a chart perspective, it is interesting to note that gold was able to rally past the (minor) peaks of mid-April and early May. However, the rally, for now, stalled between the April and March high, approximately at the November 2013 peak. A head-and-shoulder pattern could be in the making, but given the solid chart formation it is more likely that gold will move higher in the weeks ahead, at least challenging the April 2014 peak. If gold would be able to get past the September 2013 highs, close to 1450 USD, we could be sure of a new bull market. Only time will tell if and when that will be the case. |
Silver <b>Price</b> In 2014 Establishing Another Megaphone Pattern | <b>Gold</b> <b>...</b> Posted: 28 Jul 2014 01:00 PM PDT President Nixon closed the "gold window" in August 1971. That decision enabled the exponential growth of debt, paper currencies, and prices. A few examples: The process is simple and clear. Remove the gold backing from the dollar, enable the creation of nearly unlimited dollars and debt, many more dollars chase somewhat more goods, prices increase, proclaim it is "all good" and then create even more dollars and debt. So what about silver?Silver prices have increased but in a disorderly manner. Rather than focus on details, examine the big picture – 43 years of monthly price data in one chart – and divide that 43 year period into four "megaphone" shaped patterns on a log-scale chart. See below: Zone 1: Silver accelerated higher from $1.39 in 1971 to about $50.00 in January 1980 – a massive bubble. Zone 2: Silver crashed (bubbles always crash) down to $3.50 in 1991. In nominal dollars, this was a loss of about 93%. Adjusting for inflation it was even larger. Zone 3: Silver "flatlined" for a decade and moved from about $3.50 in 1991 to about $4.00 in 2001. Zone 4: Silver rallied post 9-11 in a new bull market from about $4.00 in 2001 to nearly $50 in 2011. How will silver prices change in the next five years?Door # 1: The upward slanting megaphone pattern continues and silver surges to $100 or more by 2016 – 2019. or Door # 2: A new megaphone pattern slanting downward (shown in red as # 5) has begun and will terminate at perhaps $6 in the 2016 – 2019 time period. There are other choices than these two options, but it seems likely (to me) that silver prices will move much higher, while it is remotely possible that silver prices will continue their downward collapse, as represented by the above options. The Bullish Choice – Door # 1:
The Bearish Choice – Door # 2. (Sarcasm alert! I do not take the bearish view as a serious alternative.)
ConclusionsOver 40 years of silver prices can be represented by four zones of megaphone shaped price patterns. My interpretation is that zone 4 – a long and aggressive move upward – is still in progress. My round number target is $100 or more in 2016 – 2019. Although I hope that the powers-that-be will not choose to create hyperinflation in the US, if hyperinflation does occur, the $100 target will be easily bypassed and much higher prices will be "in play." Additional Reading: GE Christenson | The Deviant Investor |
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