Best of the Week
Most Popular
1.RED ALERT: Paris Terror Attacks - What to Expect Next - STRATFOR
2.Paris Terror Attacks, Death Pangs of a Dying Religion, and Impact on BrExit EU Referendum - Nadeem_Walayat
3.Paris Terror Attacks, Islamic State Attempting to Spark Civil War in France - Nadeem_Walayat
4.Three Shocking Charts That Prove Gold Price Rally Is Coming - Sean Brodrick
5.Stock Market Nifty-Fifty Becomes Fab-Five; Return of the 'Four Horseman' - Mike_Shedlock
6.Africa Population Explosion - Why Europe's Migrant Crisis is Going to Get A Lot Worse - Video - Nadeem_Walayat
7.Gold Mining Stocks May Be The Buy Of The Century - Jeff_Berwick
8.Grandmaster Putin Beats Uncle Sam at His Own Game - Mike_Whitney
9.BRICS? No, CRISIS - Raymond_Matison
10.UK Housing Market Affordability, House Prices Momentum and Trend Forecast - Nadeem_Walayat
Last 5 days
Stock Market Consolidation Week - 29th Nov 15
A Black Friday for Gold Prices - 29th Nov 15
Politicians Driving The World Towards War - Fourth Turning - 29th Nov 15
Stock Market Down Monday, Gold Price Bottoming? - 29th Nov 15
Turkey Downs Russian Jet to Draw NATO and US Deeper into Syrian Quagmire - 28th Nov 15
Stock Market Quiet Week as Primary 5 Continues - 28th Nov 15
Black Friday, Weekend for Europe's Migrants - 28th Nov 15
HUI and Gold - Who's Leading Whom? - 28th Nov 15
Gold And Silver - No Ending Action, But End May Be Near - 28th Nov 15
Social and Cultural Distress Dividing The Nation - Fourth Turning - 28th Nov 15
Sheffield Houses Prices 2015, Best Estate Agents As Rated by Buyers and Sellers - 28th Nov 15
Stock Market Top Valuations, at a Critical Juncture - 27th Nov 15
The Top Shopping Opportunity on Black Friday - 27th Nov 15
Economics Is About Scarcity, Property, and Relationships - 27th Nov 15
UK Immigration Crisis Hits New Extreme of 336k Net Migration, up 32% on 2014 - 27th Nov 15
Vauxhall Zafira B Fire Danger Recall - What to Do Video - 26th Nov 15
Triggers In US Dollar Collapse - 26th Nov 15
Apple Stock is a 10-Year Short - Bear Market Environment - 26th Nov 15
U.S. Federal Reserve Rate Hike - 26th Nov 15
George Osborne's War on Buy to Let Sector Trending Towards Doomsday - 26th Nov 15
Will Turkey Drag NATO into War With Russia in Syria? - 25th Nov 15
George Osborne’s Autumn Statement and Spending Review Full Text - 25th Nov 15
Will Fresh QE From ECB Boost Gold? - 25th Nov 15
Sheffield, Yorkshire and Humberside House Prices Forecast 2016-2018 - 25th Nov 15
Investors Watch Out For The Auto Industry… - 24th Nov 15
BEA Revises 3rd Quarter 2015 US GDP Economic Growth Upward to 2.07% - 24th Nov 15
Stock Market Supports Are Being Broken - 24th Nov 15
Is Gold Price on the Verge of a Breakout? - 24th Nov 15
Fed’s Tarullo: U.S. Interest Rates Liftoff Should Wait for Signs of Inflation - 24th Nov 15
Silver Price, COT, US Dollar Updates and More - 24th Nov 15
UK Regional House Prices Analysis - Video - 23rd Nov 15
Crude Oil Swinging For The Fences - A 20 to 1 Option Play - 23rd Nov 15
US Dollar, CRB, Oil, Gas, Copper and Gold - The Chartology of Deflation - 23rd Nov 15
UK Regional House Prices, Cheapest and Most Expensive Property Markets - 23rd Nov 15
Stock Market Rally Losing Momentum? - 23rd Nov 15
Will Gold Price Drop Below $1000 Soon? - 23rd Nov 15
Gold and Silver Sector Big Green Light and Low Risk Entry Setup... - 23rd Nov 15

Free Instant Analysis

Free Instant Technical Analysis

Market Oracle FREE Newsletter

Reasons to Get Excited About Japanese Stocks

Silver Confirms the Bullish Outlook for Precious Metals

Commodities / Gold and Silver 2012 Jan 06, 2012 - 10:42 AM GMT

By: Przemyslaw_Radomski


Best Financial Markets Analysis ArticleThe new year started off with a bang with precious metals out-shining the competition. Is this a harbinger of things to come? We think so and we are not alone. Forecasts for gold for 2012 include a price per ounce of $2,200 by Morgan Stanley, $2,050 by UBS, and $2,000 by Barclays.

The year 2011, for other than gold investors, has been a disappointment, more like a train wreck. Growth has been paltry, unemployment remained high, sovereign debt in the stratosphere. The U.S. political system has been dysfunctional unable to make easy decisions, never mind the hard ones. There was no housing rebound and the eurozone looked like it was a house of cards. But look on the bright side. Despite a prophecy by Harold Camping, the world did not end on May 21.

There was also some other good news. There was no double dip in 2011. Osama bin Laden was “laid to rest in a solemn ceremony concluding upon impact with the Indian Ocean at a terminal velocity of 125 miles per hour,” (at least that’s the official version) in the words of Dave Barry,  humor columnist for The Miami Herald. Moammar Gadhafi and other dictators also suffered major setbacks (to put it mildly.)

There are some issues hanging over the economy in 2012 that will determine if the upcoming year will also be a disappointment.

In 2011, American politics was silly undermining confidence in ways that damaged economic prospects. There was the April battle over spending that nearly shut down the government and would have had a devastating effect on the ability of Congress to continue spending insanely more money than it actually has. The December standoff was over whether to continue a cut in the payroll tax that both parties agreed to in principle. But most damaging was the summer brinkmanship when many House Republicans threatened to block an increase in the debt ceiling — which would have meant a default on U.S. debt — unless they got their way on major spending cuts. The sides hammered out an agreement under which the government will continue to spend tons more money than it has while a super committee will devise a plan to solve this problem once and for all. This committee fell short of its goals. Perhaps in 2012 we will see “a Super Duper Committee.” Even after a deal was struck, Standard & Poor’s cut the U.S. government’s credit rating, blaming the downgrade on the reduced “effectiveness, stability and predictability” of American policymaking.

Stay tuned. This year’s election is going to be a cliffhanger. Obama has going for him the lackluster Republican lineup. He may actually win. But with a razor thin mandate and a Republican-controlled Congress, Obama in his second term will not have much room to maneuver. With the economy in such a fragile condition, it would be best, whatever the outcome of the November election, that the result be decisive and unifying. Meanwhile, a move toward a libertarian approach sill appears unlikely.

To see what is likely to happen in the precious metals market in the nearest future, let's begin the technical part with the analysis of silver (charts courtesy by

In the very long term chart for silver (if you’re reading this essay at, you may click on the above chart to enlarge it), we see that silver has bottomed once again. If the nearest resistance level is broken, a significant rally is possible. RSI levels support the significant rally theory beginning now.

This is in tune with our previous comments on gold, published in our essay on the possible bottom in precious metals:

The fact is that “breakdowns” similar to the one we’re seeing just now have been (…) followed by the final bottom of the consolidation (…), which was in turn was followed by a strong rally. In these cases, lower prices were never seen thereafter. Consequently, from both fundamental and technical perspectives, gold remains in a bull market, and what we're seeing right now may be the best buying opportunity that we'll see in the coming years.

On top of that, there is more to read from the very-long term silver charts.

In this second very long-term chart for silver, we see that the cyclical turning point worked perfectly as prices reversed sharply right at that point and then began to rise. These moves further increase the odds that we have seen a major bottom and it could very well be years before silver’s price is as low as it has been recently (or we may never see silver price as low as we just did).

This is by no means a sure bet, but twice previously, when silver bottomed at cyclical turning points in 2004 and 2010, we have seen an ultimate low – lower prices never followed. The long-term charts suggest that at least a medium-term rally is underway at this time.

Looking at silver’s short-term chart, the situation is a bit less clear. A cyclical turning point is close at hand and it is not yet clear whether we will see a bottom or a top. Neither appears to invalidate the points made previously since long-term implications are more important and carry more weight than those obtained from short-term charts. For example, we could see a small pause (a local top and then a local bottom) within a rally close to the end of the month.

When silver finally breaks above the declining resistance line (gray) and the 50-day moving average, much clearer signals will emerge. The outlook based on this chart appears bullish at this time but another week or two seems to be needed to tell the whole story.

Summing up, the situation in silver appears to be very bullish at this time based on the long-term indicators. Overall, the situation appears to be quite bullish since long-term indicators carry more weight than short-term signals.

To make sure that you are notified once the new features are implemented, and get immediate access to my free thoughts on the market, including information not available publicly, we urge you to sign up for our free e-mail list. Gold & Silver Investors should definitely join us today and additionally get free, 7-day access to the Premium Sections on our website, including valuable tools and unique charts. It's free and you may unsubscribe at any time.

Thank you for reading. Have a great and profitable week!

P. Radomski
Sunshine Profits

    Interested in increasing your profits in the PM sector? Want to know which stocks to buy? Would you like to improve your risk/reward ratio?

    Sunshine Profits provides professional support for precious metals Investors and Traders.

    Apart from weekly Premium Updates and quick Market Alerts, members of the Sunshine Profits’ Premium Service gain access to Charts, Tools and Key Principles sections. Click the following link to find out how many benefits this means to you. Naturally, you may browse the sample version and easily sing-up for a free trial to see if the Premium Service meets your expectations.

    All essays, research and information found above represent analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Mr. Radomski and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above belong to Mr. Radomski or respective associates and are neither an offer nor a recommendation to purchase or sell securities. Mr. Radomski is not a Registered Securities Advisor. Mr. Radomski does not recommend services, products, business or investment in any company mentioned in any of his essays or reports. Materials published above have been prepared for your private use and their sole purpose is to educate readers about various investments.

    By reading Mr. Radomski's essays or reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these essays or reports. Investing, trading and speculation in any financial markets may involve high risk of loss. We strongly advise that you consult a certified investment advisor and we encourage you to do your own research before making any investment decision. Mr. Radomski, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.

Przemyslaw Radomski Archive

© 2005-2015 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


07 Jan 12, 10:52
More Pain Is On The Way

With the slow stochastic going from 10ish to nearly 70ish in just over a week all that this has accomplished is to relieve the oversold condition in the precious metals. With nearly 2 out of 3 precious metal articles touting a buying opportunity is at hand I believe prices will continue to erode until most of the bulls are looking into the abyss questioning their position. Then and only then will the pain be over.

Post Comment

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

Biggest Debt Bomb in History