Gold Market Update
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Gold has gone and done it - after first breaking out upside from its 3-arc Fan Correction in January, a major positive technical development celebrated in the article Gold powering up for major uptrend - SECTORWIDE BUY ALERT, last week it smashed through the ceiling of resistance at and towards $680, with subsequent solid action confirming that this was a genuine breakout. In the Gold Market update of 23rd January it was stated “The situation is now very finely balanced with an army of traders either sat on the fence, or, depending on which way it breaks, on the wrong side of the trade. When it does break out - and it is beginning to look like it will be to the upside, there will be a stampede and an upside breakout from here could thus easily involve a $20 - $30 up day for gold.” As you all know, that is exactly what we saw last week.
Many gold stocks are confirming the gold breakout. Of particular note is Streettracks, which is now in position for a powerful uptrend, and is the subject of an update on the site.
So, we are looking very good here. The prospect now is for the uptrend to gather pace. The first stop will be the resistance at last year’s high, which it is worth noting is nowhere near as significant as the resistance level that has just fallen. Thus, although gold is likely to pause/react when it gets to $730, it shouldn’t be held in check for too long before the uptrend reasserts itself and it breaks out and advances to substantially higher levels.
Silver Market Update
Clive Maund
Although silver did not stage such an obviously important breakout as gold last week, it did nevertheless rise in tandem, and succeeded in breaking out above important resistance at its early December highs, putting it in position for “The Big One”, which will be the breakout above last year’s highs at about $15.20, which is an objective that silver, with its propensity for big moves could easily achieve in a single day from the current position.
We had earlier looked to delineate a 3-arc Fan Correction in silver to match the one in gold but didn’t find a truly satisfactory fit. Now, however, after last week’s action, we have it. On the 14-month chart (the time period for which was selected to allow last year’s high to be viewed without interference from writing on the chart) we can see how a 3rd fanline drawn from last year’s highs across the early December highs is what created the resistance that caused silver to start rolling over the week before last before it suddenly blasted higher in tune with gold last week.
Having broken out above the resistance at the December highs, in the process breaking out above the 3rd fanline of the 3-arc Fan Correction, silver has arrived at the threshold of “The Big One”. Silver is now very well placed to stage a breakout above the highs of last year, an event that could well involved a $1 - $1.50 up day, which will mark the start of a powerful uptrend.
Clive Maund, Diploma Technical Analysis
Copiapo, Chile, 25 February 2007
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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
