Tuesday, June 19, 2012

Six Billion Dollar Bet

Six Billion Dollar Bet

He should have invested ib Gold and Silver....
Watch Six Billion Dollar Bet on PBS. See more from FRONTLINE.

Tuesday, June 5, 2012

Gold Silver Ratio at upper end of range

The Gold Silver Ratio is currently around the 56-57 area which many would consider high based on the coinage act of 1792. (The Act defined the proportional value of gold and silver as 15 units of pure silver to 1 unit of pure gold.)  The ratio of Gold to Silver in the earths crust is somewhere between 15 and 20 to one, I've read that it was 18-1.
So, if one believes that the Gold Silver Ratio will eventually go down possibly under 20-1, this may be a good opportunity to accumulate or add to your position. That is if you are going to hold long term. (Which IMO is over a year and may be another 5 years for this commodity bull market).

Can the ratio go higher?  Sure, possibly 60+ depending upon how speculators see the economy as Silver is tied to an industrial metal.  Economy is bad, less demand for the metal...  at least that is how the street sees it.

Gold rallied huge last Friday and was up quite a bit more than Silver. Speculators will flock into Gold in uncertain times and will generally stay away from it's volatile brother, Silver. Gold is currently leading with Silver following.

The 56 ratio is trading near the recent top produced in late Dec, 2011.  Will a double top be produced? Both RSI and Stochastics are overbought and suggest a possible reversal to the downside. There should be major resistance to the upside just under the 60 level as noted by the low point in Sept 2009.

Sunday, June 3, 2012

Summer Rally?

Nice move in the precious metals markets on Friday June 1st due to the jobs report and the ongoing issues with Greece / Europe.

Gold was up ~$59 for the day and stopped right at the 50 day moving average. RSI and Stochastics were oversold and are heading towards the overbought area.  Technical swing traders may pile in paper gold to continue the push up.
Could May be the low for the year?  Possibly, but you just never know for sure.  Gold was trading near the bottom of the large range that was produced last year between July and early September. It will be a little while for it to pierce the 200 dma and then a crossover of the 50 over the 200.

Silver did not move as much as Gold as it was pulled up because Gold went up. Gold led, Silver followed.  When you have the RSI and Stochastics both in oversold area at the same time, there is a good chance for the investment to move towards the upside. That was the case here, but Silver still needs more speculators to invest for a stronger move to the upside.

The low produced in May was higher than the low produced at the end of 2011 which is a good sign. (Higher lows)

The Gold Bugs Index HUI had a nice day up 6.74% and over the 50dma.  Again, the RSI and Stochastics were both in the oversold area and a reversal to the upside was produced. A push over the 100 and 200dma may signal trading algorithms to take positions in the senior and mid tier miners.

The miners are trading at historic low PE's and speculators/traders are taking positions at these low prices. The street still has faith in the Gold and Silver miners as they were up as a whole while the Dow and S&P were hammered on Friday. (A very good sign)

Swing trading the GDX and GDXJ may be of interest to those that have a side trading account. (Aside from the core physical position)