Best of the Week
Most Popular
1.Are UK Savings Interest Rates Finally Starting to Rise? Best Cash ISA 2017 - Nadeem_Walayat
2.Inflation Tsunami - Supermarkets, Retail Sector Crisis 2017, EU Suicide and Burning Stocks - Nadeem_Walayat
3.Big Moves in the World Stock Markets - Big Bases - Rambus_Chartology
4.The Next Financial Implosion Is Not Going To Be About The Banks! - Gordon_T_Long
5.Why EU BrExit Single Market Access Hard line is European Union Committing Suicide - Nadeem_Walayat
6.Trump Ramps Up US Military Debt Spending In Preparations for China War - Nadeem_Walayat
7.Watch What Happens When Silver Price Hits $26...  - MoneyMetals
8.Stock Market Fake Risk, Fake Return? Market Crash? - 2nd Mar 17 - Axel_Merk
9.Global Inflation Surges, Central Banks Losing Control and Triggered the Wage Price Spiral? - Nadeem_Walayat
10.Why Gold Will Boom In 2017 - James Burgess
Last 7 days
Top Ten US Dollar Risks - 27th Mar 17
The Popularity of Gambling and Investing Amongst Students - 27th Mar 17
Is Political Betting on the Rise? - 27th Mar 17
US Stock Market Consolidation Time - 27th Mar 17
Russia Crisis - Maps That Signal Growing Instability and Unrest - 27th Mar 17
Goldman Sachs Backing A Copper Boom In 2017 - 27th Mar 17
Foundation – Fall Of The American Galactic Empire - 27th Mar 17
Stock Market More Correction Ahead - 27th Mar 17
US Dollar Inflection Point - 27th Mar 17
Political Week Presurres US Stock Market - 25th Mar 17
London Terror Attack Red Herring, Real Issue is Age of Reason vs Religion - 25th Mar 17
Will Washington Risk WW3 to Block an Emerging EU-Russia Superstate - 25th Mar 17
Unaccountable Military Industrial Complex Is Destroying America and the Rest Of The World Too - 25th Mar 17
Silver Mining Stock Fundamentals - 24th Mar 17
A Walk Down the Dark Road of Bad Government - 24th Mar 17
Is Stock Market Flash Crash Postponed Until Monday? - 24th Mar 17
Stock Market Bubble and Gold - 24th Mar 17
Maps Of Past Empires That Can Tell Us About The Future - 24th Mar 17
SNP Independent Scotland's Destiny With Economic Catastrophe, the English Subsidy - IndyRef2 - 24th Mar 17
Stock Market VIX Cycles Set To Explode March/April 2017 – Part II - 23rd Mar 17
Is Now a Good Time to Invest in the US Housing Market? - 23rd Mar 17
The Stock Market Is a Present-Day Version of Pavlov’s Dog - 23rd Mar 17
US Budget - There’s Almost Nothing Left To Cut - 23rd Mar 17
Stock Market Upward Reversal Or Just Quick Rebound Before Another Leg Down? - 23rd Mar 17
Trends to Look Out For as a Modern-day Landlord - 23rd Mar 17
Here’s Why Interstate Health Insurance Won’t Fix Obamacare / Trumpcare - 23rd Mar 17
China’s Biggest Limitations Determine the Future of East Asia - 23rd Mar 17
This is About So Much More Than Trump and Brexit - 23rd Mar 17
Trump Stock Market Rally Over? 20% Bear Drop By Mid Summer? - 22nd Mar 17
Trump Added $3 Trillion in Wealth to Stock Market Participants - 22nd Mar 17
What's Next for the US Dollar, Gold and Stocks? - 22nd Mar 17
MSM Bond Market Full Nonsense Mode as ‘Trump Trades’ Unwind on Schedule - 22nd Mar 17
Peak Gold – Biggest Gold Story Not Being Reported - 22nd Mar 17
Return of Sovereign France, Europe’s Changing Landscape - 22nd Mar 17
Trump Stocks Bull Market Rolling Over? You Were Warned! - 22nd Mar 17
Stock Market Charts That Scream “This Is It” - Here’s What to Do - 22nd Mar 17
Raising the Minimum Wage Is a Jobs Killing Move - 22nd Mar 17
Potential Bottoming Patterns in Gold and Silver Precious Metals Stocks Complex... - 22nd Mar 17
UK Stagflation, Soaring Inflation CPI 2.3%, RPI 3.2%, Real 4.4% - 21st Mar 17
The Demise of the Gold and Silver Bull Run is Greatly Exaggerated - 21st Mar 17
USD Decline Continues, Pull SPX Down as well? - 21st Mar 17
Trump Watershed Budget - 21st Mar 17
How do Client Acquisition Offers Affect Businesses? - 21st Mar 17
Physical Metals Demand Plus Manipulation Suits Will Break Paper Market - 20th Mar 17
Stock Market Uncertainty Following Interest Rate Increase - Will Uptrend Continue? - 20th Mar 17
Precious Metals : Who’s in Charge ? - 20th Mar 17
Stock Market Correction Continues - 20th Mar 17
Why The Status Quo Is Under Increasing Attack By 'Populist People Power' - 20th Mar 17

Market Oracle FREE Newsletter

Elliott Wave Trading

Gold And Silver - Around The FX World In Charts

Currencies / Forex Trading Jan 27, 2015 - 12:21 PM GMT

By: Michael_Noonan

Currencies

There has been some discussion about how the Swiss National Bank breakaway from the 1.20 peg to the Euro was a shot to the upside for gold. It appeared to us that the rally may have been sparked a few days ahead of the announcement, and last week's mostly sideways aftermath was the froth on the rally. It may continue, but the narrower range could just as well lead to a pullback, discussed in last article, Timing Is The Most Important Element, [paragraph above each weekly chart of silver and gold].

It made sense to compare the leading currency charts on the Foreign Exchange markets [FX], to see a) does a correlation exist, and b) take an overview of a market we rarely visit. As the SNB decision to make an apparent[?] independent break from the rest of the central banks, the risk exposure in trading in the bank-[rigged]-dominated FX markets is far greater than any occasional rewards.


Here are the weekly gold and silver charts as a comparative reference to the FX charts reviewed:

Two bars ago was when the Swiss National Bank [SNB], made its announcement, on the last day of the week, Friday, to cut loose from the 1.20 euro peg. Price had already rallied prior to Friday, and that may be reflective of the "insiders" positioning for the news event. Whether that is true or not does not really matter. More interesting is how last week was a much smaller bar range, after the news was out. It tells us sellers were active keeping buyers from extending the rally any higher. One implication is short-term profit taking into the public buyers who want to get in before they "miss the move."

You will see the difference of last week's small range for gold v the same week for each fiat currency reviewed.

Keep in mind, an ounce of gold is an ounce of gold. It never changes. What does change is the number of fiat units it takes to purchase the same ounce. For example, gold does not go up in value relative to the declining euro, rather it takes more and more euros to purchase one ounce, the ounce of gold being a constant, as is true for silver.

On the other hand, the fiat dollar has been rising in imaginary "value," which means it requires less fiat units to purchase the same ounce of gold. The irony should escape no one that the country with trillion-dollar annual deficits, with a question as to whether any physical gold exists, and no industry from which to grow, aka the United States, is the one country recently stronger than gold. There are few who do not know this has been due to active manipulation of gold for decades. That is soon to change. [Soon is relative.]

Gold - Weekly Nearest OHLC Chart

We are seeing a change in price behavior in both silver and gold, and for the past few weeks, the gold silver ratio has come in from 74-75:1, the number oz ounces of silver equal to an oz of gold, to just over 70:1, indicating silver is performing a little better relative to gold. This is happening as the probability of a bottom in the PM market is growing, but yet to be confirmed, and we have stated silver can outperform gold.

Silver - Weekly Nearest OHLC Chart

Here is the bully fiat currency with absolutely zero intrinsic value, rallying strongly for 7 consecutive months of higher lows and very little overlap on bars, a sign of strength. It is only the elite's Western central bankers that keep saying gold has no intrinsic value, and it doesn't earn interest. No mention has been made that more and more fiat currencies have gone negative, charging customers to hold fiat cash in any of the insolvent banks, and they are ALL insolvent.

Russia has a vast accumulation of physical gold, and it is the richest country in the world for natural resources. Where the US is choking on $18 trillion in debt that it can never repay, Russia has very little national debt. Why is the US fiat Federal Reserve "dollar" rising while the Russian ruble has been declining? One answer: military might with the US threatening actual war and/or economic war against any country opposing use of the "dollar" as the world's reserve currency, which is fast losing that status in almost every nation.

The Wizard of Oz lives on, for now. Too many countries are looking behind the US curtain, recognizing the fraud and choosing to do something about. Like the SNB apparently snubbing the Western banking system, as a maybe, but for sure is saying to the US, "No mas!"

US Dollar Index - Monthly Nearest OHLC Chart

It is mostly against the fading military might of the bully tactics of the Fed that gold has not held its own. All we can say is, change is in the air, everywhere, and the US is on its last leg. One cannot bet against the worthless fiat "dollar" for now, but it is a sure bet that gold will prevail, once again, as it has against other currencies, as true money.

In another bit of irony, by established law, still on the books in the US, gold and silver are the only legitimate forms of money. Federal Reserve Notes have no basis as lawful money, except by a de facto coup by the moneychangers who forced through the Federal Reserve Act of 1913. U S citizens do not pay attention to history and do nothing about the coup.

US Dollar Index - Weekly Nearest OHLC Chart

Partner in crime with the US, which has seen its fiat rise for 7 months, the UK pound has declined for 7 straight months of lower highs. It takes increasing more pounds to buy an ounce.

British Pound - Monthly Nearest OHLC Chart

Last week declined after a few overlapping bars as price approaches what could be a support area, and it may hold, but one needs to be aware of how the euro failed to hold its apparent potential support.

You have to watch how price reacts to a support or resistance area and not just blindly expect it to hold. Compare how the euro acted as it approached potential support and how the Swiss franc responded at its potential support, [the last 2 sets of charts]. It may help to better understand if the pound will hold or fail.

British Pound - Weekly Nearest OHLC Chart

Obviously, the C-dollar is fading, relative to gold, in recognition that paper fiat is what it is: a massive Ponzi scheme promoted by the elite's central banking system designed to steal every nation's wealth. Most people have still not woken up to this reality. There is the expression, "Seeing is believing," but for some reason it fails notice in the Ponzi banking system.

Canadian Dollar - Monthly Nearest OHLC Chart

A more graphic picture of how the action of the SNB, in rejecting the Ponzi fiat system, had it impact on the fast-declining C-dollar.

Canadian Dollar - Weekly Nearest OHLC Chart

As the euro approached potential support, there was no stopping it, no pause to see if it would hold, and it did not. The SNB saw the same thing and realized it would be economic suicide to remain a player on the Kabuki fiat theater stage. Exit left, SNB.

Euro FX - Monthly Nearest OHLC Chart

A more detailed sinking of the SS Euro. The Swiss did not want to suffer the same fate, plain and simple.

Euro FX - Weekly Nearest OHLC Chart

To the prime actor, the Swiss franc reflecting the actions of the SNB. We have made comments on the charts that left clues to be wary of the short side, which in no way implies the stated clues foretold the 30% jump that followed. Rather, the comments are how markets advertise their intent. Sometimes it is more obvious than at other times, but the signs are there.

Swiss Franc - Monthly Nearest OHLC Chart

We had kept an eye on the franc since the Swiss failed gold referendum in November, and we could see reasons for not wanting to be short, but it was from the cheap seats where we had no skin in the game. Each lower time frame was evolving in a way that echoed the same message: this market could have a natural reaction higher. That was the extent of our thinking.

Swiss Franc - Weekly Nearest OHLC Chart

Here you can see the clincher: almost 6 straight days of smaller range overlapping bars. We are on record enough times in the past mentioning what overlapping bars signify. It is for reasons like this why we continue to say how charts, specifically in the form of a price/volume relationship, provide the best and most reliable market read.

Given all of the news, and now the reaction of the SNB rejecting the fiat system, it is more important than ever to recognize the wisdom of holding physical silver and gold. Just like the Swiss franc jumped 30% in value overnight, at some point, the same can happen with gold and silver.

That is your take-away message.

By Michael Noonan

http://edgetraderplus.com

Michael Noonan, mn@edgetraderplus.com, is a Chicago-based trader with over 30 years in the business. His sole approach to analysis is derived from developing market pattern behavior, found in the form of Price, Volume, and Time, and it is generated from the best source possible, the market itself.

© 2014 Copyright Michael Noonan - 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.

Michael Noonan Archive

© 2005-2016 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

Catching a Falling Financial Knife