Sunday, January 16, 2011

Jan 16 Gold & Silver

Gold has been in another pullback since the start of the year and closed at 1359.  This decline should be short lived and is a buying opportunity for those waiting to get into the market or to add to their positions. (Physical coins, bars or mining stocks)

The question is, how low will it go?  Based on previous lows, the next support levels are:
Lower Bollinger band:  1353
100 day moving average: 1344
Nov 17 low: 1331
Oct 5th low: 1313
200 day moving average:  1272 (not shown on chart)

Keep an eye on the market next week as Gold may see a bottom for the short term. One of the hardest things to do is to time the market and buy at the bottom or sell at the top. (For swing traders/futures/options). Professional traders are most likely accumulating positions on the way down and on the way back up looking to sell during the next break high above the Dec 7th 1432 an ounce.

 Here is a weekly chart of Silver going back to late 2008.  There is a fibonacci drawn from the low in 2008 to a peak in May of 2009.  The 261.8 level is right around the $30 level and is a major resistance area. (Based on the fibonacci low and high, Silver went right through the 161.8 level)  Silver had a great 2010 year up over 80%, so a correction is due. The 30 level will eventually be a support area rather than a resistance level. At that time, Silver Eagles will be >35 each at that time...

As with Gold, this is another buying opportunity for those that believe that Silver is headed higher. Keep an eye on it this coming week for a potential near term bottom.

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