Gold Market Update
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Gold has broken out of its large triangular consolidation to commence a new uptrend that should take it comfortably to new highs. The breakout is very obvious on weekly charts, which were included in the THIS IS IT article at the weekend. On the 1-year chart we can see this clear breakout and how the triangular consolidation, which, as is customary, brought the price back to the vicinity of the 200-day moving average, has completely unwound the overbought condition that had earlier existed. With the MACD indicator having risen up through the zero line, we are now in position for the advance to really get underway, although the fact that the 50-day m.a. is still below the 200-day means that we should expect brief periods of consolidation until it has risen up through it, when the advance can be expected to accelerate. It is worth noting here that although gold has broken out of the triangle, there is considerable resistance in this general area, so progress may at first be hesitant and punctuated by reactions, such as that occurring today. The minimum target for the advance is the $760 area.
In the unlikely event that the pattern aborts and gold breaks down, the point at which a general sell signal would be generated would be a break below the apex or nose of the triangle, i.e. a break below $580.
Silver Market Update
Clive Maund
Silver has broken out of its large triangular consolidation to commence a new uptrend that should take it comfortably to new highs. The breakout is very obvious on weekly charts, which were included in the THIS IS IT article at the weekend. On the 1-year daily chart we can see this clear breakout and how the triangular consolidation, which, as is customary, brought the price back to the vicinity of the 200-day moving average, has completely unwound the overbought condition that had earlier existed. With the MACD indicator having risen up through the zero line, we are now in position for the advance to really get underway. It is worth noting here that although silver has broken out of the triangle, there is considerable resistance in this general area, so progress may at first be hesitant and punctuated by reactions, such as that occurring today. The minimum target for the advance is the $18 - $19 area.
Silver is viewed as being stronger than gold. This is because its triangle is more upwardly skewed, and because its 50-day moving average did not drop back below its 200-day, as was the case with gold – a sign that silver is stronger.
In the unlikely event that the pattern aborts and silver breaks down, the point at which a general sell signal would be generated would be a break below the apex or nose of the triangle, i.e. a break below $11.30 - $11.50
Clive Maund, Diploma Technical Analysis
Kaufbeuren, Germany, 8 November 2006
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Clive P. Maund’s interest in markets started when, as an aimless youth searching for direction in his mid-20’s, he inherited some money. Unfortunately it was not enough to live a utopian lifestyle as a playboy or retire very young. Therefore on the advice of his brother, he bought a load of British Petroleum stock, which promptly went up 20% in the space of a few weeks. Clive sold them at the top…which really fired his imagination. The prospect of being able to buy securities and sell them later at a higher price, and make money for doing little or no work was most attractive – and so the quest began, especially as he had been further stoked up by watching from the sidelines with a mixture of fascination and envy as fortunes were made in the roaring gold and silver bull market of the late 70’s.
Clive furthered his education in Technical Analysis or charting by ordering various good books from the US and by applying what he learned at work on an everyday basis. He also obtained the UK Society of Technical Analysts’ Diploma.
The years following 2005 saw the boom phase of the Gold and Silver bull market, until they peaked in late 2011. While there is ongoing debate about whether that was the final high, it is not believed to be because of the continuing global debasement of fiat currency. The bear market since 2011 is viewed as being very similar to the 2-year reaction in the mid-70’s, which was preceded by a powerful advance and was followed by a gigantic parabolic price ramp. Moreover, Precious Metals should come back into their own when the various asset bubbles elsewhere burst, which looks set to happen anytime soon.
Visit Clive at his website: CliveMaund.com
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