Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Why Most Investors LOST Money by Investing in ARK FUNDS - 27th Jan 22
The “play-to-earn” trend taking the crypto world by storm - 27th Jan 22
Quantum AI Stocks Investing Priority - 26th Jan 22
Is Everyone Going To Be Right About This Stocks Bear Market?- 26th Jan 22
Stock Market Glass Half Empty or Half Full? - 26th Jan 22
Stock Market Quoted As Saying 'The Reports Of My Demise Are Greatly Exaggerated' - 26th Jan 22
The Synthetic Dividend Option To Generate Profits - 26th Jan 22
The Beginner's Guide to Credit Repair - 26th Jan 22
AI Tech Stocks State Going into the CRASH and Capitalising on the Metaverse - 25th Jan 22
Stock Market Relief Rally, Maybe? - 25th Jan 22
Why Gold’s Latest Rally Is Nothing to Get Excited About - 25th Jan 22
Gold Slides and Rebounds in 2022 - 25th Jan 22
Gold; a stellar picture - 25th Jan 22
CATHY WOOD ARK GARBAGE ARK Funds Heading for 90% STOCK CRASH! - 22nd Jan 22
Gold Is the Belle of the Ball. Will Its Dance Turn Bearish? - 22nd Jan 22
Best Neighborhoods to Buy Real Estate in San Diego - 22nd Jan 22
Stock Market January PANIC AI Tech Stocks Buying Opp - Trend Forecast 2022 - 21st Jan 21
How to Get Rich in the MetaVerse - 20th Jan 21
Should you Buy Payment Disruptor Stocks in 2022? - 20th Jan 21
2022 the Year of Smart devices, Electric Vehicles, and AI Startups - 20th Jan 21
Oil Markets More Animated by Geopolitics, Supply, and Demand - 20th Jan 21
WARNING - AI STOCK MARKET CRASH / BEAR SWITCH TRIGGERED! - 19th Jan 22
Fake It Till You Make It: Will Silver’s Motto Work on Gold? - 19th Jan 22
Crude Oil Smashing Stocks - 19th Jan 22
US Stagflation: The Global Risk of 2022 - 19th Jan 22
Stock Market Trend Forecast Early 2022 - Tech Growth Value Stocks Rotation - 18th Jan 22
Stock Market Sentiment Speaks: Are We Setting Up For A 'Mini-Crash'? - 18th Jan 22
Mobile Sports Betting is on a rise: Here’s why - 18th Jan 22
Exponential AI Stocks Mega-trend - 17th Jan 22
THE NEXT BITCOIN - 17th Jan 22
Gold Price Predictions for 2022 - 17th Jan 22
How Do Debt Relief Services Work To Reduce The Amount You Owe? - 17th Jan 22
RIVIAN IPO Illustrates We are in the Mother of all Stock Market Bubbles - 16th Jan 22
All Market Eyes on Copper - 16th Jan 22
The US Dollar Had a Slip-Up, but Gold Turned a Blind Eye to It - 16th Jan 22
A Stock Market Top for the Ages - 16th Jan 22
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Silver- To buy or not to buy – That is the question

Commodities / Gold & Silver 2009 Apr 03, 2009 - 09:55 AM GMT

By: Peter_Degraaf

Commodities

Best Financial Markets Analysis ArticleHistorically, and based on 35 years of data, gold usually puts in a bottom in March and a top in April. We've had the bottom in March (on March 18 th ), and we await a top in April.

This top in April usually lasts for several months, resulting in sideways action with a downward bias and another buying opportunity in June or July.


The next question is: Can we count on gold rising to a top in April, or is this a year where we cannot count on historical data?

(In the case of silver we most often see a top in May followed by seasonal weakness).

For the answers to our questions we turn to the charts.

Charts courtesy www.stockcharts.com and Federal Reserve Bank of St. Louis .

Featured is the weekly gold chart. The blue arrows point to the bottoming of the 7 – 8 week gold cycle. The last bottom came in week #9 and we are currently operating in week #2. Price on Thursday morning is testing the multi-month support line. It is at this juncture that people either step in and buy, or panic and sell out. As long as the fundamentals are bullish for gold (and they are), then it makes more sense to buy gold here than to sell gold. The expectation is that since we are in week #3 of the 7 – 8 week cycle, gold is more likely to rise from here than to fall below the support line.

My Gold Direction Indicator is registering +72% which is a buy signal. The supporting indicators (RSI and MACD) are positive.

Featured is the index that compares the gold and silver stocks of the HUI index to the price of gold. On Wednesday April 1 st this index flashed a buy signal, as price established itself above the 200DMA. A rising trend in this index is bullish for both gold and gold and silver stocks. The supporting indicators are positive.

Featured is the SLV silver ETF. The last three times price came near the rising support line, (including so far on April 2 nd ), buyers forced the price back up again (blue arrow). Volume has been declining during the pull-back which is bullish (green arrow). The RSI is at multi-month support (horizontal green line), and the 50DMA has just moved into positive alignment with the 200DMA, which is another bullish signal.

Featured is the chart that reflects the total bank credit at the US commercial banks. It reflects the loose policies of the Fed, as the trend is in the process of going exponential. The aim of the FED is obviously to push the trend higher. Notice at the top of the chart, some reluctance on the part of bank credit to keep rising. This reflects a slowdown in the increase in bank credit despite the Fed's efforts to force banks to have and make credit available to the market place. This in turn will cause the FED to pump money into the system even faster, as they do not want this trend to turn down. This chart then presents a picture that is bullish for gold and silver, as it makes a strong case for further accommodation on the part of the Fed.

Featured is the chart that shows the current and projected US government deficits as charted by the US G.A.O.

Federal deficits always lead to monetary inflation which leads to price inflation which leads to commodity inflation (including and especially gold and silver).

Featured is the CEF, Central Fund of Canada. The uptrend is well defined. The supporting indicators are positive. Volume has been declining during the recent pull-back which is bullish. Earlier today (April 2 nd ) I added to my holdings in CEF by buying at the 50DMA (blue arrow), and I then sent out an alert to my many subscribers, so they could do the same if they so desired.

Summary: As long as the fundamentals for gold and silver are bullish (and they are – current Washington policies guarantee it), every price dip presents an opportunity to buy.

During a bull market, every time price moves near the 50DMA it is an opportunity to buy.

A popular feature on his website are the long-term charts which are updated frequently.

“He who buys the dips and rides the waves will be a winner in the end.” Richard Russell.

“Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or today, it's electronic equivalent), that allows it to produce as many U.S. dollars as it wishes, at essentially no cost.

We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation. (Ben Bernanke Nov 21, 2002 ).

“The national budget must be balanced. The public debt must be reduced; the arrogance of the authorities must be moderated and controlled. Payments to foreign governments must be reduced, if Rome does not want to go bankrupt. People must learn to work, instead of living on public assistance”. ( Cicero , uttered in 55 BC).

“It is well enough that people of this nation do not understand our banking and monetary system – for if they did, I believe there would be a revolution before tomorrow morning”.

Henry Ford.

(These quotes are a small part of a collection of quotes found on my website).

Happy trading!

By Peter Degraaf

Peter Degraaf is an on-line stock trader with over 50 years of investing experience. He issues a weekend report on the markets for his many subscribers. For a sample issue send him an E-mail at itiswell@cogeco.net , or visit his website at www.pdegraaf.com where you will find many long-term charts, as well as an interesting collection of Worthwhile Quotes that make for fascinating reading.

DISCLAIMER: Please do your own due diligence. I am NOT responsible for your trading decisions.

Peter Degraaf 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