Quick gold and silver update

I'm in a hurry, but there's been so much volatility, that I had to create a few updated charts.

Gold really sliced past the 144 day-MA, but never touched the 200 day. Interestingly the line I fit to the 144-day MA (blue) actually serves as a pretty good trend line over the past 3 years, and gold did bounce off of that.

While gold was shooting up to $1900 the question was "is this time different?" Was this the big breakout gold bugs were waiting for, or just another example of frothy upside movement that would be brought back down to keep its very steady post-March 2009 moving averages on their linear track. Looks like the latter. We're seeing the moving averages (pink, green, above) start to head downwards just as they looked to be breaking up and away from the linear trend.

The weekly chart had been equally vague. I pointed out that nothing really game-changing happens until gold closes a week above the top black line, or else, rolls over but bounces off of the center black line. Whereas a drop to $1600 would be "par for the course." Well that's what we got -- a drop to the lower black line, only much faster than in the past. But encouragingly, the weekly chart suggests a bottom might be in. I still see a re-test in the cards. Unless that lower black line is broken, gold bugs should be very happy with this correction, consolidating lots of gains and shaking out the weak-handed momentum chasers very quickly for another major move up.

Silver, not so much. Here's the ugly chart, to which i've added what i think is going to be the next (very wide) trading range for silver in the coming month or months. If we break emphatically above $34 or below $26 ... watch out.

Here's the new "bullish" chart I reintroduced on my last post. Despite the huge overnight dip to $26, I'm going to go ahead and say the lower blue trend line has held as of now; we've closed right at it the last three days. Let's see if this can last.

1 comment:

Louis Cypher said...

Thanks GM,
Here's hoping we start to build a base here.