What Happens To Gold And Silver Next? Look Out Below?

charts are great with hindsight?

charts are created by the market so are not a reliable indicator of trend,
especially at turning points. a fake breakout is a good example of this,
where at the time it was a true chart breakout that later turned back due to
market forces.
charts should be used to optimize profits when you've already worked out
the trend and it's already going in your favour.

I believe gold should move mostly horizontal this year $12-1400 as a move
in either direction would create increased problems that shouldn't be able
to hold for a significant length of time.

HH

no

Younever know

If nothing else, it demonstrates the volatility in the PM markets. I would not be surprised to see gold @ 2,000 and silver @35 soon, or gold @1,000 and silver @10, or both. It's not the market we grew up with, safe haven seekers jump in and out like the tides. Our grandparents bought physical and held until they needed to sell (due to the premium of buying, commission at selling). With paper driving these markets, its too easy to get in/get out.

ok lets get an update, my apologies for being behind here, being involved in this day to day I get backed up and time runs out.







we'll jump right into it with gold When we last looked at gold, we had noted how it was coming into an area where there was several attempts to break up in terms of price, then it ripped above those price points and stayed above. On top of that, gold didnt have any violent rejections nor retracing its gains, rather, it has built on them and moved higher.

Lets turn to our proxy GLD to understand the price action and what we see now.







The last update I had was 2/14 and it showed how gold was rising above the line, it had broken out and was moving up. Thats a positive, holding onto gains, pull backs have not been violent. Take a look at the blue arrow. We now see gold has been consolidating in a range, a channel, some may term it even a "box" and yesterday it snapped above it with a gap up. Today we see gold dropped and entered that range once again.

Question is at this stage- does it get rejected here and stay in this box, bouncing and chopping around? Or was this just a temporary pull back? All these are unknowns at this point. We still have gold in a downtrend. The price action however has been constructive thus far.

Building slowly and holding gains is what you want to see for this trend to reverse. There are however, up ahead, areas of major resistance that could hold back or slow down price advances. one MAJOR area is the drop that happened on 4/15/13. That price point will be a major resistance area.

Silver is what we will look at next-


It looks like I didnt post up a chart on 2/14 which I am kicking myself because I hate missing a chart because it helps paint a picture of how prices work. Anyways, lets look at the SLV chart. Notice again how we have the 2 green arrows near the aqua line below where silver held and bounce. Notice the blue arrow, there we have silver breaking out with a BIG gap up.

It held that gap up, chopping around, even made an attempt to poke higher (take a look at the yellow arrow and notice the range)and then started lower. Now, take notice of the red line I put in there. Notice how price has several times bounced off the lower end of the gap up.

It has held up time after time. Does it hold here or does it give in and we see silver moving lower? I dont know how many times it can hold up, any more times of probing the price area where that red line is and silver can go lower.


Its been pretty interesting price action in gold and silver for the past few months. The big question that is on everyones mind is- are prices done going down? I have no idea. I can only guide myself by price and experince. Its still to early to declare that gold and silver have enough behind them to say we are going back up.

Why are prices rising? I have no clue. Morever, I dont care. I really dont. If they keep running higher here, I am fine with it, I'll find a way to profit just as I have on the way down. But I can saya few things regarding the price movement.

First, many times the market fools a lot of people. In many cases, when everyone is leaning in one direction, prices tend to run in an opposite direction. For a while, sentiment towards gold and silver has been very negative. Many times, when everyone and his brother is talking about "how bad" something is, especailly in assets like stocks, commodities, events happen where prices start to turn around and run higher.

Now that doesn't mean it sticks and runs higher. Sometimes it is a short flash in the pan. Sometimes, an asset does run higher. But then it runs out of steam, chops around in a range and drops again. Or it simply does nothing, trading in a range for years.

So, my point is this- respect the price action for now. Time is needed to see if gold and silver build on their gains. Other ocmmodities this year have been running higher after being stuck in downtrends such as coffee, corn, sugar to name a few. Perhaps this year we see some sort of bounce.

A final comment I want to make is that beware of anyone who tries to give an answer to what is happening with gold and silver. In fact, in the financial markets, be careful with anyone who gives you a reason why a certain asset does soemthing. Those reasons are usually wrong and only known AFTER a move has completed its actions.

Rather, pay attention to price. It will show its hand, give clues. PRICE NEVER LIES. At this point with silver and gold, if they reverse and give up all these gains, we know for sure that this was just a flash in the pan bounce. However, if gold and silver can hold on these gains, continue to grind higher, we will get a much clearer picture as to how solid this move is.

People are certainly contrary creatures. After months of lackluster physical sales of Silver I got a run the last week and a half. I had so many customers that I put a nice premium on them and still they came. It got to the point where I put another premium on them to discourage them from buying. Why? Because people tend to blame other people than themselves when they make a buying decision that turns sour. And guess who they blame? My Competitors around town are out of 90 percent. When I was younger it was considered sound advice to "buy low, sell high". Now it is considered the apex of financial wisdom to "buy high, lose your but, sell at a loss". If you think I'm joking look at all the Bubbles and Ponzi schemes supposedly bright people have bought into in the last decade.