Tuesday, July 12, 2011

Gold/Silver summer trading range continues

Daily chat of the world Gold index from the low produced on 1/28/11 of $1307 to the high on 5/2/11 of $1577.
A fibonacci retracement is drawn from the low and high that is mentioned above.  Gold has been trading within the bands of 61.8% to just under the 100% high point since May 2nd.  Based on seasonal's, Gold may breakout to new highs in September, the highest average % gain of any month within the year.

Gold is seen more as a currency as it has had numerous up days with the US Dollar. With Greece and other countries in bad fiscal shape, the flight into both Gold and the US Dollar is seen. In the long run, the US Dollar will continue to deteriorate with the government increasing the debt ceiling so they can create more $$$.  Be patient and this market should see significant gains to 2015.

Daily chart of the World Silver index from early May.  Silver is also in a summer trading pattern between the fibonacci bands of 38.2 to  50. (Based on last years August low to the high produced in late April)

Silver has produced a series of lower highs since the short covering rally in the 2nd week of May. The bollinger band has narrowed in and there should be a breakout one way or another before September. (In general and based on Seasonal data, the breakout is likely to go to the upside, but when you have market manipulators, banksters/comex you just never know).  It's just best to be on the 'right' side of the trade and do not trade against the pro's/manipulators.

With the economy still in speculative shape at best, some traders are selling the industrial metals which include Platinum, Palladium, Copper and Silver. This can be a good issue for Silver as it will be seen as a monetary metal and have a Gold/Silver ratio below 20/1 at some time in the future. It's a waiting game.

1 comment:

  1. I read your post that's really useful information about the market.I really appreciate your post and you explain each and every point very well.Thanks for sharing this information.


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