Thursday, February 23, 2012

Bullion breakout

The PM markets are finally breaking out of their base at the end of January.  Silver was up to $35.56 which broke above the major lower trend-line.

One of the next resistance levels will be around the $36.75 area, the orange downtrend line.  The bullion banks may be loading up on the long side as well as the hedge funds that spot upwards and downwards trends quickly.

Most of the junior, mid tier and senior miners are also following Gold and Silver's uptrend.

Year to date returns:

GLD (Gold) 13.83%
SLV (Silver) 27.69%
SIL (Silver miners index) 20.25%
GDX (Gold miners index) 11.33%
GDXJ (Junior Gold miners index) 19.71%

The senior miners are slightly under-performing Gold at 11.33%.  Speculators seem to be placing their bets on the undervalued Junior miners at this time.  The Silver miners index is under-performing the bullion YTD, but that may change with increasing bullion prices and good earnings reports.

Swing trading the bullion and mining ETF's to the long side should be profitable for the next few weeks.

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