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Scorpio

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#1
Gold Update
Silver Analyst
Posted Feb 9, 2016

Gold has been on a roll these past few weeks as it has rocketed from the lows of $1046 on December 3rd to a high of $1200 this past day. That is an advance of 17% and doubtless many are wondering if this is the start of a new multi-year bull market for gold (and by consequence, silver)?

As things stand, gold may be about to encounter some headwinds. First, we look at the channel that gold has been descending gently down since August 2013. As you can see, gold has touched the top channel line three times in that period only to fall back to the lower line of the channel.

(Click on image to enlarge)



Obviously, this ping pong cannot continue forever. Gold is either going to break through the top line or drop through the bottom line. So, the odds are that gold will touch the upper line at about $1212 only to fall back. But, will this mean gold will automatically drop back to the bottom channel line for a fifth time somewhere in the region of $1000?

To put this in perspective, how far have the previous bull runs within this weekly channel run? These are tabulated below and should be compared to the current run up of 17%. In this light, a 17% run is not indicative of what may or may not lie ahead. However, an anticipated run of 100% or more cannot start unless it first advances 17%!

PRICE RUN DATES GAIN
$1180.20 - $1433.73 24/06/13-26/08/13 21%
$1182.35 - $1388.54 30/12/13-17/03/14 17%
$1130.02 - $1307.64 30/11/14-19/01/15 16%
May I also offer an opinion on the 200 day moving average which has been breached by this current move? This average has been breached three times previously while gold has been bounded by this weekly channel. The truth is that moving averages are not good technical indicators when the price action is whipsawing in this manner. What we need to see now is gold breaking through this upper channel line, but also presses on.

By that I mean, the last 2 1/2 years have been a continuing series of lower lows and lower highs. So, let’s see if gold can take out the previous high of January 19th 2015 when gold hit $1307. When that happens, gold would have moved 20% which technically constitutes a bull market and then perhaps we can begin to talk about a serious bull market in precious metals.

###

Silver Analyst
email: silveranalysis@yahoo.co.uk

Further analysis of silver can be had by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain newsletter subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk.

321gold Ltd

http://www.321gold.com/editorials/silveranalyst/silveranalyst020916.html
 

Scorpio

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#2
I wasn't watching that weekly downtrend, and it is a good one,

Where we draw close to that time in space where it is put up or shut up for gold

click on the chart to enlarge

there is downtrend line resistance just over 1200, in addition to resistance sitting just under 1200.
 

solarion

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#3
The dollar just broke below 96...AU and AG did an abrupt about face and went positive. Something very serious is going on in the background and it's hammering the dollar hard. I understand the last of the long term oil hedges are coming off between now and March. Perhaps some big banks are going to follow some energy companies into insolvency.