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Gold and Silver
1. Personal Note
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Arguments for lower prices:
- Gold failed to take out resistance at US$1,755.00
- Gold now below 50-MA (US$1,737.77)
- Possible ABC correction in gold underway? Would point out to a low around US$1,635.00 (if length of A wave = length of C wave)
- Gold overall still in sideways movement (between US$1,525.00 and US$1,795.00) since September 2011
- last COT report shows that commercials are massively short around 1,750.00US$
- Silver lost embedded slow stochastic reading
- Mining Stocks continue to perform weak, HUI index below 200-MA
- Recession in Europe, slower demand from china and India
Arguments for higher prices:
- Gold breaking down below important psychological number at US$1,700.00 but now quite oversold
- Gold currently testing uptrend since august 2012 and uptrend from 2008
- Lower Bollinger Band (US$1,697.01) offers strong support
- Gold still clearly above 200-MA (US$1,665.71)
- Despite declining prices all Gold ETF´s have seen strong demand during the last 12 days!
- US Mint Gold American Eagle sales in November spiked vertically higher!
- Silver is outperforming Gold. This may signal inflationary rally (as well excessive strength in copper...)
- Longer term Gold in similar correction pattern like 2008/2009. Breakout to US$2,000.00 expected to happen in summer 2013
- New uptrend in precious metals since august 2012 that should carry gold up to US$1,850.00 and 1,900.00 until spring 2013.
- US-Dollar Death Cross (long-term 200-MA broke above its short-term 50-MA in mid of October) continues to push US-Dollar lower
- Seasonality until spring very promising for precious metals sector
- Never fight the FED. Unlimited QE -> money printing all over the world will push asset prices in all sectors higher...
- Throughout history, periods of massive money creation have always been inflationary and this time should be no different.
- Santa Claus/Year End Rally has been pushing stock market higher so far (although there have been some possible reversal signs yesterday...).
- Gold is just close below important support around US$1,696.00. I think chances are pretty good that this support will hold. There might be some more consolidation in between US$1,700.00 and US$1,740.00 before Gold is finally ready to move up again and challenge the resistance at US$ 1,800.00.
- If instead Gold is closing below US$1,696.00 a retest of US$1,670.00 and 200-MA is in the cards. Even a break lower to US$1,640.00 - US$1,635.00 would become possible. But so far I do not expect this bearish scenario.
- Overall I continue to believe that Gold will move up to US$1,850.00 and around 1,900.00US$ until spring 2013.
- Fundamentally Gold is still in 2nd phase of this long term bull market. 1st stage saw the miners closing their hedge books, 2nd stage is continuously presenting us news about institutions and central banks buying gold. 3rd and finally parabolic stage will bring the distribution to small inexperienced new investors who then will be acting in blind panic.
- Nothing has changed
- Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
- Price target DowJones/Gold Ratio ca. 1:1
- Price target Gold/Silver Ratio ca. 10:1