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We're Seeing a Gold-en Cross, But What About Silver?

By: Ben Drage | Saturday, February 11, 2017

A Golden Cross is a bullish breakout pattern normally of the 50 period MA in relation to the 200 period MA.

There has been plenty of interest in my recent chart showing this happening in Weekly Gold. To re-cap, we have only seen the 50 Week cross the 200 Week four times in the last twenty-five years and, according to Ned Naylor-Leyland, this was, "predictive of 3-10 years of subsequent market direction". The previous time that the 50 Week MA broke UPWARDS in Gold was in 2002 and price then ran from $290 to the all-time high of $1923. This indicator has just broken upwards again.....

Gold Futures Weekly Chart
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Typically with Silver it has not been so clear cut - in fact the Moving Averages have yet to cross - it looks as though it won't be long before they do as the 50 Week is at 17.56 and rising whereas the 200 Week is at 18.07 and falling. In the last fifteen years we have seen two upwards Golden Crosses - in 2003 price ran from $4.70 to $21.44 and in 2009 it went from $17.80 to the all-time high of $49.82.

Silver Futures Weekly Chart
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That's potentially big news, but these are really long term indicators - it's great for stackers and traders that price looks to be moving into a sustained uptrend, but what's happening in the medium to shorter term? At Forex Analytics we look to provide clear and uncluttered charts, using Median Lines (Pitchforks) to identify High Probability, Low Risk entries and exits for traders and investors.

For example, the recent fall in the price of Silver hit a low of $15.46 - we had followed it down using 60 minute and 240 minute charts until it reached the Lower Parallel of the Daily Pitchfork shown in Chart 3. It was not a surprise to see price rebound strongly from there and we touched a recent high of $17.88.

Silver Futures Daily Chart
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It's all too easy to only think of Silver in US Dollar terms. We monitor it across currencies - take a step back and look at the enormous potential upside when pricing it in GBP, CAD or JPY.

Chart 4 is Silver in British Pounds on a Weekly basis and the Pitchfork not only shows a significant line of support but also the potential for price to run much, much higher.

Silver in British Pounds Weekly Chart
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Chart 5 is Silver in Canadian Dollars and once again the Pitchfork delineates lines of Support and Resistance - the green Sliding Parallel above is at about C$29.

Silver in Canadian Dollars Weekly Chart
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Chart 6 shows Silver in Japanese Yen at long term Resistance - a solid break through the 2000 level could presage a strong move.

Silver in Japanese Yen Weekly Chart
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There is certainly the opportunity for significant upside in Silver across a number of currencies. Is the approaching Golden Cross in US dollars the lighting of the blue touchpaper before we see some serious fireworks.......

 


Forex Analytics provides Premium Technical Analysis of Precious Metals, Currencies Commodities and Indices at www.forex-analytics.com or email support@forex-analytics.com

 

Author: Ben Drage

Ben Drage
Forex Analytics

Forex Analytics' Ben Drage is an experienced, thirty-five year veteran of the Financial Markets

I was born and spent my formative years in London and am half British and half Australian. After completing my Law degree at Oxford University I continued my studies by taking my Bar Finals Exams.

However, being from a family with interests in the financial sphere I decided to look to embark on a career in the City of London. I joined a boutique moneybroking firm in 1982 and progressed via a number of different entities in that environment, eventually specialising in the nascent interest rate swap and options markets.

Despite revelling in the surroundings of a dealing room, in 1998 I decided to leave the City and to concentrate on my personal trading. The freedom that came with that choice has allowed me to live in different parts of Europe and to pursue my interests across the financial field. I currently live in a rural part of Southern England.

I very much enjoy the process of technical analysis - viewing it almost as a chess game where intention and meaning have to be gleaned from a two-dimensional chart. Spatial awareness and how to react to it are very important parts of the trader's armoury and I have discovered the process of coaching this increasingly rewarding. Moreover I have noticed that the exercise also makes me focus more efficiently on my own decision making.

My thirty-five years' experience in the markets has led me to appreciate that simplicity is almost always the key to success. I have found that Median Line Analysis is far and away the most effective way to accomplish this. By setting up Forex Analytics I am hoping to share my enthusiasm to "Decode the Markets” by deciphering them and stripping away the complexity and confusion that often baffles veterans and novices alike.

I want Forex Analytics to provide World Class Analysis to traders and investors, at an affordable price, by getting back to the very essence of what drives the financial markets."

I can always be contacted by email at support@forex-analytics.com

Copyright ©2017 Ben Drage