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Silver and Gold: Who want to earn from Bullion sector? Keep in mind below levels and hurdles. I seem for markets that are trading in fairly dependable ranges where support and resistance levels hold up very well. Today how to play with silver? You can buy silver anywhere. Targets: 63370-63574-63775-63875 Hurdle: 62857 Remember, hurdle is very important thing here. Once silver cross and close below to hurdle then it may kiss 62391-62134.
MCX Gold rest over. Now it will take U-Turn and learn you lot in future…
Keep your eyes on crude oil opening bell. Once open downside then you can sell it. Big profit opportunity. Targets: 4790-4758-4736 Remember opening bell is very important thing here
Let me introduce with one superb hot item. It’s a Cardamom! Go and buy it without targets: 991-908-1001 [Remember opening bell should be upside]
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We’ve been surprised at the recent action in the precious metals complex. During the recent correction the shares were showing quite a bit more strength than the metals. Then the shares took a dive below support yet the metals maintained their recent lows! How do we interpret this wild volatility in the relationship between the shares and the metals? Quite often we look at daily and weekly charts. Now is the time to take a look at the monthly charts which can help us get a better read on the larger trends at hand.
The monthly chart of Gold shows the yellow metal in a very healthy consolidation between $1550 and $1800. Gold’s current retreat from $1800 has lasted two months. Back in 2009, Gold brokeout to a new all-time high in the seventh month of its consolidation. Presently, Gold’s bollinger band width is at a multi-year low and its three-month volume average is at a two year low. Also, the RSI has bottomed and made a higher low. Even if Gold touched $1600, it would remain in healthy position for a breakout in 2013.
Gold’s companion Silver is currently trading in a tighter consolidation with $35 as resistance and $27 as support. Note that Silver has tested and held above $27 six times in the last fifteen months. Silver also held above the rising 40-month moving average which supported the market in 2009 and 2010. The RSI has also made a higher low and volume has trended down during the past seven months.
Meanwhile, the gold stocks (HUI) look weaker than the metals. Momentum hasn’t confirmed its bottom as the market is in a clear range from 400 (support) and 525 (resistance). Note the current 11% decline in the HUI for the month while Gold and Silver are still in positive territory. Nevertheless, if and when the HUI prints a monthly close above 525, this chart would like quite bullish and general sentiment would certainly pick up.
The evidence argues that the bottoms remain well intact and the metals are consolidating before the next breakout which entails Gold breaking $1800 and Silver $35. However, these breakouts are by no means imminent. Since we are dealing with monthly charts that means potentially three or four more months of consolidation. Furthermore, sentiment data such as the COT structure and public opinion polls need some improvement before the market could sustain a breakout. Thus, more consolidation could be the order of the day for the metals.
Continued consolidation in the metals also helps explain recent weakness in the HUI, which is simply testing the lower half of its own consolidation. The shares see the weakness in the overall market and perhaps sense that an immediate breakout in the metals is unlikely Furthermore, while central banks have put themselves in position to act they haven’t actually done anything yet. When the market senses their action it will likely mark a final low within this consolidation.
The good news is the metals remain in fine shape and so to do most of the mining equities we follow. If we are indeed correct that the metals and shares will remain range bound then your task is simple. Prepare yourself for further consolidation by having your buy list ready and then be ready to act when the time comes. A wise friend once told me that in a bull market the goal is to accumulate positions at the lowest prices possible. With mining equities trading well off their highs, now is the time to do your research and find the companies that will lead the next leg higher and outperform the gold stock sector.
3rd attempt (within 11 months) to take out heavy resistance around US$1,790.00-1,800.00 failed and Gold clearly broke down from bearish wedge in October
COT Data again pretty bearish for gold and silver
Mining Stocks crashed down through support and 200-MA
US-Dollar in short term uptrend since mid of september, so far no clear trend reversal
Recession in Europe, slower demand from China and India
Arguments for higher prices:
Gold & Silver bounced impulsively from oversold levels. This price action has a very bullish character.
Gold clearly above 200-MA (US$1,665.66)
Reversal at Fibonacci retracement, this confirms “correction” within uptrend
Gold/Silver ratio heading lower again, creates MACD buy signal for precious metals
Longer term Gold in similar correction pattern like 2008/2009. Breakout to US$2,000.00 expected to happen in summer 2013
New uptrend in precious metals since august 2012 that should carry gold up to US$1,850.00 and 1,900.00 until spring 2013.
US-Dollar Death Cross (long-term 200-MA broke above its short-term 50-MA in mid of october). This signals dollar weakness!
November very bullish seasonals. Seasonality until spring very promising.
Never fight the FED. Unlimited QE -> money printing all over the world will push asset prices in all sectors higher…
Throughout history, periods of massive money creation have always been inflationary and this time should be no different.
Santa Claus/Year End Rally has probably started yesterday
massive tension and escalation in middle east (Israel & Gaza, maybe Egypt and other states to get involved ?)
Conclusion:
After the initial impulsive bounce from oversold levels Gold has been consolidating between US$1,740.00 and US$1,705.00 in a bullish fashion. Now Gold looks ready to break out above US$1,740.00 very soon. This breakout will start a heavy wave of buying/short covering and should bring gold very fast to next resistance at US$1,790.00 / US$1,800.00. Here another setback must be expected. Overall I continue to believe that Gold will move up to US$1,850.00 and around 1,900.00US$ until spring 2013.
Any break below US$1,705.00 and especially US$1,696.00 would be very bearish but is not expected.
Long term:
Nothing has changed
Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
The love for gold has been reignited in India, according to the World Gold Council (WGC) in its Gold Demand Trends for the third quarter of 2012. India regained its title as the strongest performing market, overtaking the greater China area, as the country experienced a bounce-back in demand due to improved sentiment during the festival season.
Compared to the third quarter of last year, Indian gold jewelry demand grew by 7 percent while gold bar and coin demand rose 12 percent. Total consumer demand was 223 tons, compared to 205 tons this time last year. The second largest market was Greater China, which consumed 185 tons in the third quarter of 2012. This was less than the 201 tons consumed in the third quarter of last year.
Together these markets in the east made up 55 percent of the world’s jewelry and investment demand, according to the WGC. Although India experienced a setback earlier this year when gold shops boycotted a proposed tax on the yellow metal, imports recovered by July “as inventory levels were bolstered (aided by a well-timed dip in the local price) and the market adjusted to the customs duty,” says the WGC.
The third quarter has historically been a strong seasonal time for the Love Trade to come alive in the east. Monsoon rains and the festival season in the fall are generally associated with the buying and giving of gold. Still, for the year, don’t expect the Love Trade in India to be as strong as it was in 2011, as gold demand remains subdued with the ongoing weakness of the rupee.
On its way down from 168, GLD broke its first support level and came to rest on the second (200-DMA) from which it had a bounce. Last week, I suggested that it might find some resistance on the small horizontal red trend line, which it has, and which caused it to pull back three points. It’s difficult to see how it could have much more of a decline right away if the market is going to have a mid-correction rally, so we can probably expect the near-term trend to turn up again, perhaps reaching the top channel line (blue) before rolling over again.
If GLD does not have much of a rally from here – especially if the market does rally – it will be an indication that some decent weakness can be expected into the cycle low. In any case, subsequent action should form a P&F pattern which will help us determine the extent of the decline into the 25-wk cycle low.
UUP (dollar ETF)
UUP normally goes against equities and gold. The index appears to be extended short-term and eady to pull-back. This can be seen in the indicators, one of which is very overbought and the other beginning to show some negative divergence. If a short-term top is forming, this should help the market to find a short-term low.
