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

The fear of QE causing massive inflation was the catalyst for a big bump in PM prices. The Fed announced QE1 in November 2008 and PM prices took off. In November 2010 the Fed announced QE2 and prices rose even faster. However, massive inflation never materialized and the economy continued to improve sending PM prices back down. By the time QE3 was announced in September 2012 all we saw was a little spike before returning to the downtrend. It wasn't only the USA doing QE, other major economies did similar QE packages along with the US. The UK did QE in September 2009, November 2010, October 2011, February 2012, and July 2012.

I bought silver in 2011 expecting QE3 to keep pushing PM prices up. I lost that bet.

Bernanke has been very clear with his plans, he wants 2% yearly inflation. QE is designed to put money into the economy and boost the economy. As the economy improves QE will be reduced then eliminated. If the Fed starts seeing inflation rise above the 2% target they will raise interest rates and sell bonds back into the economy to remove money from the economy. The plan is simple and consistent. Whether one agrees with the plan is a different matter.

On the topic of PM prices: GLD down 2.03% and SLV down 2.41%

So last week, where gold and silver started, they finished in the past trading week. It seemed as perhaps gold would challenge the gap, hit and fill it.

Instead, gold once again came into the gap and stopped, and closed the day at the low of the day. Pretty much can be said with silver, however it looks even weaker than gold no attempt to even fill the gap once. Lets look at our proxies as they closed on Friday-

GLD- lower high, lower low.

SLV- lower high, lower low.

This sort of price action is typical when an asset is going to make an attempt to continue with its move lower. Perhaps Monday we see a gap down. For the past several weeks however, we have seen gold and silver exhibit this sort of move, to the downside, only to see them dip briefly and bounce right back up. Hence, why I say a slow train wreck motion, your classical broken asset.

If we see a gap down followed by a bounce to the upside, the first thing that comes to my mind is that this will be a continued s-l-o-w drip down in both silver and gold. In fact its price action right now reminds me so much of sugar and coffee and how they have traded in the past year and half where there were many dips, which in turn were bought, bringing the price back up, followed by more dips that brought yearly lows, followed by a bounce and more new freshly lows, ala slow grind style.

That's one big reason why I am still saying, don't buy these dips. Be patient, in fact above all, before even thinking of getting a bargain in gold and silver, think of how much more valuable it is in being PATIENT and waiting for this downside move to play out.

I realize this is hard, and it can be fatiguing and perhaps easy to say "well its only gone down a bit so I dont mind if it drops a little more" but trust me, the little dribbles in price as it goes down will add up over time and you will have wished you had waited.

Thanks for the valuable views, guys! I'm glad I focused on numismatics & semi-numismatics as purchases rather than just bullion.

I think I've come to the conclusion that silver & gold are done for the time being and won't recover for months or even years. I'll make small purchases when I can afford to and only good stuff.

My new goal for a move in silver or a ratio change is 2020. I've heard this is the year when a shortage in silver is more likely. But time will tell.

Thanks, Yup, for keeping us posted as to when you think an uptrend will begin. But I'm not holding my breath... silver is like an unraveling thread and it's far from over...

Just a quick note here

notice gold trying again to go into the gap. Silver ehhh still lagging gold. lets take a quick look at our proxies

GLD- into the gap again, having trouble tho staying above 136.75, it did get over this but staying below right now, watch to see if it can climb and maintain above this number

SLV- 23.10 is the number you should be watching closely,,, see if it can poke above this number and stay above, as this would get it started into the gap.

I expect a TON of volatility going forward so this is NOT the time frame to be buying gold and silver. We could see even the gap filled with the volatility but remember if a rapid movement up occurs, the same will happen in the opposite direction. So, be very careful right now, batten down the hatches or do nothing if you aren't nimble.

There are a few factors going across markets. Expect to hear how things are out of control, things aren't getting better, how this is the time for gold and silver to be bought. I disagree, I think simply global equity markets are set for a correction, volatility is rising and the best thing is to do sit back and watch.

As far as Silver; I am buying buying buying.

yup.... the 200MA is telling you DONT BUY. Furthermore, I could get super technical here, but I wont.. (because it just doesn't help the folks around here, better to keep it simple and easy to understand) however, since you bring it up, what kind of MA are you talking about SilverD?

Furthermore SilverD, you can throw out the MA's, they are NOT concrete areas, they are not support or resistance, they are ONLY mere reference points and thats IT. Gold and silver are showing right now that assets can move lower than anyone can expect.

Finally, at BEST, some technical traders would not be buying here, they would FIRST wait to see if it can get get over the 50 day.

So as you can see, buying here would be buying blindly.

get technical please