Don't be tempted by gold or silver -- yet
Investors who buy the metals in the current environment take a big risk, as the charts predict further declines.
- For the August contract, a break below the support at $1515-$1520 would trigger heavier selling, with first good support in the $1464-$1472 area
- The weekly Starc- band is at $1432 with the weekly trend line support in the $1400 area
- Weekly on-balance volume (OBV) made new highs two weeks ago. It has turned lower but is well above its sharply rising weighted moving average (WMA)
- The move through resistance (line b) in early April signaled the rally to the May highs. The weekly and monthly OBVs are positive for the major trend
- Daily OBV (not shown) also confirmed the recent highs but is close to dropping below its weighted moving average
- There is initial resistance for the August gold contract at $1546-$1555
- A drop below this support should signal a pullback to the 50% support and the equality target in the $140.75 area. This also corresponds to the weekly Starc- band
- More important 61.8% support is at $137.70
- The daily OBV has dropped below its weighted moving average and closed on trend line support at line f
- Weekly OBV (not shown) did confirm the recent highs and continues to looks strong, so a deeper correction should be a buying opportunity
- The daily chart has resistance now at $150-$151.50 with major resistance at $153.60. The weekly Starc+ band is at $156.20
- The 61.8% retracement support from the July 2010 lows is at $29, while the completion of the triangle formation projects a decline to the $28 area
- The daily OBV is still above its weighted moving average, but a break of support at line c is likely to precede a completion of the triangle formation
- The weekly OBV (not shown) did confirm the May highs
- Initial resistance is now at $36.71 and then at $37.72 (line a). The 38.2% retracement resistance is at $38.20
- The weekly uptrend from the 2010 lows is at $50, which is the next major downside target
- The weekly OBV shows a well-established downtrend, line f, as it was much weaker than prices at the recent highs. It dropped below strong support (line g) in early May
- The daily OBV (not shown) is also negative, as it shows a pattern of lower highs and lower lows
- There is first resistance now in the $55 area with much stronger resistance in the $57-$57.50 area
Tom is wrong.He's just another Keynesian who has been indoctrinated to believe that only new debt can cure old debt.Gold and Silver are not stocks to be traded or speculated.They are MONEY.Most people around the world(except most Americans) understand this simple fact.
I will continue to buy every month regardless of price or volatility.Precious metals are being manipulated like never before,and any investor who realistically thinks that the fiat global debt cycle we all are participating in will miraculously be solved is in for a rude awakening.
Gold and Silver are not fiat currencies that can be printed on a whim.I am very patient, and I have no problem waiting for the real value of my metals to be realized.In fact,I love the price suppression as it allows me to buy more.
ETFs like SLV and GLD are nothing more than fiat instruments designed to deceive investors.Good luck to all those investors stupid enough to think that they will be able to take delivery of the physical metal when they want.Like the actual inventory at the COMEX,it exists only on paper.
And with the unregulated derivatives market now worth $1.5 quadrillon,nations all over the world completely bankruot, perpetual war by the U.S.,and an endless stream of printed money still to come,I'll take my chances on an asset class that's existed for thousands of years.
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Stocks drift lower and bonds are hit as investors await the Fed. Prepare for higher volatility this week.
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