Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Gold and Silver Analysis - Precious Points: Is This the Big One?

Commodities / Gold & Silver Sep 23, 2007 - 02:03 AM GMT

By: Joe_Nicholson

Commodities “A new attempt at $725 is entirely likely given the expectations for next week, but losing the psychologically important 7-handle is also a realistic possibility. A move of the 5-week moving average above $700 for the first time in this entire bull market would be a more convincing indication of the sustainability of the current move. The next move in silver could be in either direction, but … recent action has been encouraging. There's no lack of reasons to be cautious at these lofty levels… far from a call to sell gold and silver, it is a call for caution”. ~Precious Points: Old Number 7 , September 15, 2007


Remember this chart?

On September 9th , this update told you that a Fed rate cut could be the catalyst that propels gold to the target in the chart above, clearly at least more than $750. As I'm sure you know, the Fed's surprising 50 basis point rate cut sent gold on a moonshot through $725 and above the May 2006 highs. And that for the first time in recent memory the 5-week moving average in gold futures is above $700 is a testament to the tenacity of this commodity and the potential longevity of this move! What's more, the target of the chart above and the RSI in the chart below show there can easily still be a higher high before this move is done.

The chart below shows that silver also had an excellent breakout week, finally taking back $13 as expected, recognizing resistance at the 200-day moving average and support at the equilibrium point where the 5-, 50-, and 200-day average had converged back in June.

A look at a longer term chart shows silver rocketed up this week from support at the 5-week moving average back up to resistance around the late-May/early-June resistance just under $14. Though again looking short term over bought, the weekly RSI shows silver could also easily see an extension of this move, probably as high as $14.20. Though new highs in the short term appear unlikely from here, this illiquid and highly volatile commodity is subject to dramatic moves and that could make new highs inevitable if investor sentiment and underlying economic conditions continue to drive money toward inflation safe havens.

If the sentiment in recent editions of this update has seemed sour, it should be noted that this tone of caution has not been sounded to keep scalpers or swing traders from profiting on the targets and expectation expressed herein or on the TTC forums. Certainly there's no lack of optimism in the metals markets and amongst the analyst commentators. Instead, the intent has simply been to offer a prudent reminder that all blowoffs end ugly for everyone except those who are forearmed with the knowledge they are taking short term positions and choose their trade vehicles appropriately.

Though the Fed went against every public indication they'd made with their larger-than-expected rate cut, the threats expressed last weekend to this run in gold persist. The two major camps in response to the rate cut seem to be that either the Fed knows the future will be very bad and is trying to preempt a recession, or that the Fed just churned up the makings of the next bubble and will be crucified on a cross of inflation. Given the certainty of increased housing defaults, the ongoing uncertainty of toxic asset ownership, the (un)health of the American consumer as assessed based on outstanding credit instead of retail sales, and now the pessimism of the Fed, caution requires we not ignore the former even if scalping the latter. In other words, the time to load up on physical metal is probably closer to the 50-week moving average than multi-month highs.

Finally, I'd like to just add that Tennessee is a gorgeous State filled with the friendliest people and plenty of exhilarating outdoor activities. And though I didn't make it to the distillery in Lynchburg this time around, I did celebrate this week's gains with some of the good stuff and hope you've been able to do the same. Cheers!

by Joe Nicholson (oroborean)

www.tradingthecharts.com

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts,, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual.  Check with your licensed financial advisor or broker prior to taking any action.

Joe Nicholson Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules