Saturday, May 5, 2012

Gold, Silver, HUI/Gold Ratio

3 year Gold chart, the consolidation continues.  Gold is still trading under the 200 day moving average and is in a slight downtrend.  A mid term wedge pattern is formed which typically ends with a break up or down, we should see some movement one way or another within a few months...?  Possibly post summer...?

3 year Silver chart - A clear downtrend is seen with Silver as well as a mid to long term wedge pattern. It is trading below the 200 day moving average and the RSI and Slow Stochastics are near the oversold level. Similar to Gold, the price will typically break either up or down through the wedge trend lines. The question is, which way is it going to break?

If the cartel want's to cover their shorts, expect the price to break down.  They can load up on ZSL, purchase puts on SLV and short the futures contracts and make a lot of fiat. Maybe the CME will raise margin a few times to slam the price back to the low 20'ies?  Easy money when you know when the margin increases will be announced and in effect.

If Silver should get slammed, the cartel as well as others (Soro's, Carlos Slim, Goldman, etc...) will probably go long to make a few more fiat bucks. A few hundred million is pocket change for them, but they will take the profit...

Gold/HUI Ratio  (HUI Index divided into Gold)  Gold and Silver stocks are trading at lows that haven't been seen in a few years.  Why purchase Gold or Silver shares when the S&P500 is up 8.87% YTD?  (For reference, the GDX is down 14% YTD)

The long term PM charts are still in a bull market, so those with physical bullion can just go about their business without worry. The PM savings account should not be viewed in fiat currency, but in how many ounces you actually own.

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