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Is Silver Outperforming The Gold Fractal?

Commodities / Gold and Silver 2012 Feb 10, 2012 - 08:55 AM GMT

By: Hubert_Moolman

Commodities

Best Financial Markets Analysis ArticleBelow, is an extract of my Silver Premium Update for 25 January 2012:
Since my last silver articles (here and here), the silver chart has been following the patterns, I have been tracking, quite nicely. Below is an updated version of the gold vs. silver fractal:


I have highlighted the patterns (marked 1 to 10) on gold and silver to illustrate how they are similar. It seems that silver is now just past point 12, and it has broken out at the blue downtrend line. If it follows the gold pattern exactly, it will move along in the channel formed by the two brown lines, just like gold did. If this happens, we could still wait a long time before the $50 level is challenged.
Below, is another comparison between gold and silver to put the above in perspective:

Here, I am comparing the same patterns, but I am just including a longer timeline before and after. I have marked the two patterns (of the previous chart) with points 1 to 5 (different numbering than before). I have also drawn a blue line where the top of the ascending triangle (as per previous article) was – just to give us perspective.

So, like I said before, if silver is to follow the gold pattern exactly, it would follow the red drawing, which would mean, it could take a very long time before we pass the $50 with some momentum. Based on the comparison of silver, to its 1970s pattern (as per prior article), we could follow the green drawing. This could mean we could pass $50 much sooner.

Currently, I expect it to form something more like the green drawing; however, we need to see some evidence of that over the coming weeks. This means that there should be acceleration in the silver price, as compared to the gold chart. The first thing that needs to happen (I think) is that price needs to break out (and stay out) of the channel (formed by the two brown lines) in the first chart.

This kind of thing did happen before, as you will see from an extract of my October 2010 Premium Update, below:

As per that update, if silver was going to follow gold exactly, it would have taken a long time before it broke out of that upward trending blue line. However, there was acceleration in the silver price, as compared with gold, and it ended up breaching the upward trending blue line, much faster than the gold pattern suggested.

Note that there is more detailed analysis (including fractal analysis) in the Gold Mining Fractal Analysis Report.

For more detailed analysis of gold, silver and the Dow, you are welcome to subscribe to my free or premium service.

Warm regards and God bless,

Hubert

http://hubertmoolman.wordpress.com/

You can email any comments to hubert@hgmandassociates.co.za

© 2012 Copyright Hubert Moolman - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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