Gold breaks out to the upside!

The Gold Bulls get their way today with a move up $16.50 to close at $1385. This takes out the previous high of $1382 so this may start an upwards trend of higher highs and higher lows for December. 

If hedge funds and institutions have sold this year to lock in profits, most of the major selling may be over...?  If so, we may head up to the $1400 area and beyond for the month of December...  The seasonal trend for Gold in December is generally positive.

Silver Nov 30th.....Bullish Breakout!

The Silver price was heading into the point of the lower and upwards trend lines and something was going to happen, either a break low or a break high.  The bulls had their way today with a close of $28.19 (3.64%), above the last break high of $27.89.  A test of the even $30 area should be within a few days.

I would guess that most hedge funds and other institutional funds may have sold already to book profits for the 2010 year. (50%+ is not bad right?)  If so, we may see a bull rally in December and into the end of the year...  we shall see, stay tuned.

Silver in high demand

Gold 2 year weekly chart

Here is a two year weekly chart of the World Gold Index. It is from the 2008 lows of $691 an ounce.  You can see that Gold has had 4 peaks since then, Feb 09, Dec 09, June 10 and Nov 10.

The fall seasonal rally last year (09) started in Sept (2nd) and peaked in early December (3rd), about 3 months.  The rally this year started in August (July 29th reverses the downtrend), one month earlier than last year. If it were to rally the same duration as last year, it would take it to the end of October. But it continued rising another week and a half to a peak of $1424 on November 9th.

Fund managers may have sold and taken profits for the year already. They may see that the current rally started one month earlier and may be ending a bit earlier than last years Dec 3rd peak...?

There is a 'Head and Shoulders' pattern forming which is typically a Bearish formation. (But not always the case). The left shoulder's low is $1315 and if this were to be pierced, we will most likely head into a year end correction. $1388 is the first resistance level that would need to be pierced to produce a bullish trend to make a move to the $1424 all time high.

Nov 24th Silver

Silver closed flat at $27.57 on Wednesday, the day before Thanksgiving.  It is above the short term 15 day moving average and off of the lows of last week.

I have drawn a trend line down from the peak a few weeks ago and the lower support trend line. You can see that it is coming to a point which will be a breakout either to the upside or downside in my opinion.

My guess based on QE2, Seasonals and the overall trend of Silver that it will break to the upside.  

On the other hand, Silver has gone up over 62% year to date ! ! !  I would not be surprised if it were to break low because of that fact.  Funds and Institutions will also want to lock in profits for the 2010 year and may be taking profits early and before a drop in the price. (Look at last years Gold / Silver price after December 3rd).

Gold Nov 23rd, 2010

Gold was up today with the US Dollar index. North and South Korea have tensions and certain countries within Europe have debt issues.  People flock to safe investments in uncertain times which is why Gold was up $13.50 today.

Gold pulled back to the 50 dma which was also near the Fibonacci 23.6 level of support (Double support!) It may have some resistance going through the $1388 level as it was the previous high a few weeks ago.

Last year in early December, Gold hit a top and pulled back for the rest of the month. It is speculated that funds already had a sizable gain in Gold for the year and wanted to lock in their profits. (It's nice to show a big gain to your shareholders).  Keep an eye out for this potentially happening again.  At his time, Gold has a year to date return of 27.1%.

Silver shooting for $30

World Silver Index, Nov 22, 2010

Looks like Silver will attempt a run for $30 an ounce within the 2010 year!  There was a small pull back at the end of Oct, a run up to $29.34 and another small pull back to the 38.2 fibonacci level.

It's trading above all 3 key moving averages and has fair support near the 15 dma. Silver is on track for a outstanding overall year with a current 60+% return. 

Silver started the 2010 year at $17.17 an ounce.