Loading ...28 April 2016
Gold Daily and Silver Weekly Charts – Off We Go Into the Wild Blue Yonder
Gold and silver got some legs today, following through in a reasonably well-behaved manner to the upside in this current trend channel, which can be easily seen on the chart.
It is challenging its old nemesis, the overhead resistance at 1270 which has been capping rallies for several weeks. I suspect gold will be breaking out to the upside once it can clear that resistance, and take a crack at running up to the top of the trend channel which is around 1310-1320 about the place where I think gold may meet it.
The cup and handle is looking good, but will not activate until we break out and stick a close through the top of this trend channel which nicely defines what is a slanted cup.
Last night I had a look at a different chart for gold that indicates that if the cup and handle does activate, it will reach its next big battle around the 1550 level, which is the lower bound of the trend channel that it had been in prior to the breakdown in price and the bear market which seems to be near ending.
Gold and silver are manipulated markets, being traded as currencies and abstractions, especially with regard to gold. As you know I am expecting the pressures on the ‘gold float’ to assert their dominance over the highly leveraged paper markets at some time around midyear, maybe with the June contract.
However, forecasting markets that are rigged by determined financial engineering with a relatively free hand to do naughty and perhaps even foolish things is difficult. So we ought to be prepared for a broader range of the usual outcomes from charts like these.
The buck went down today, most likely on the weaker than expected GDP estimate, and the likelihood that any Fed rate hikes will be short lived indeed.
Silver is not the leader at this point, as that role is being fulfilled by gold. I don’t think that says anything about a precious metals bull market. It seems to indicate that this rally is being driven by more monetary issues particular to gold, and the structure of the physical gold market, than a general inflationary move in commodities.