Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Rebirth Of Gold And Silver Bull Market

Commodities / Gold & Silver Sep 11, 2008 - 07:58 AM GMT

By: Roland_Watson

Commodities Best Financial Markets Analysis ArticleBack in April I wrote an article entitled "The Death of Gold" which suggested a longer term correction was on the cards for gold. I was partly led to that conclusion by the headline article below from The London Times dated 14th March 2008. Three days later gold topped at $1032 and has dropped as much as $773 for a 25% correction. Silver has not surprisingly fared worse with a drop as great as 45% due to its thinner and more volatile markets.


We exited most of our silver positions at $18 at the end of March and have not been back in since apart from the odd drip feeding of physical bullion. The reason was purely down to Elliott Wave analysis and the following interpretation gleaned from the five year silver chart.

In other words, when wave 5 was over expect some big action to the downside because silver is correcting the entire bull market since 2003! We have now got that and got it in spades for silver but nevertheless the current price levels do not surprise me in the slightest. Forget about conspiracies or massive short manipulation. If you believe these entities have power then sell your silver at the next rally and park your money in something that is safer. Elliott wave theory for months saw this coming, no need for any other explanation - period!

Where this correction could bottom is a matter of conjecture which I addressed to subscribers in April with five different approaches that centered on $11.90 give or take a couple of dollars. For example, Elliott wave theory offers the guideline that a correction to an impulse wave will tend to terminate around the price territory of the wave 4 that preceded it. Note that silver is currently right in the middle of that area.

Or we could employ Fibonacci ratios to the 2003-2008 wave and come up with $12.50ish for a 50% retracement or $11 for a 61.8% retracement. We had hoped silver would level out at $12.50 which is still a good point for the long term buy and hold investor to drip feed but alas the drop continues towards the 61.8% level.

As for gold, the 38.2% retracement of $255 to $1032 (i.e. $735) may yet hold but do not exclude a 50% retracement to $644 at an extreme.

The point being this, forget about 200 day moving averages and RSI values when this kind of event happens. You need something else to make sense of what is going on. Silver investors out there are chewing their fingers to the bone; they want something solid to put their feet on. The ultimate comfort is the confidence Elliott wave theory gives to see this coming and also point further ahead to events not only beyond this first bull leg but beyond to a glorious finale for silver, gold and any other asset that rallies itself against the loose foundation of fiat money.

Right now, the US Dollar index is pushing former support at 80. Plenty of traders and investors are selling gold and silver in anticipation that the mighty dollar gets back above 80 and back to its old ways. They may be right, but don't bet on another dollar bull ruling the herd again.

Wave one of the 30 year silver bull is over and the wave two correction is now in force. Expect wave three to set a new all time record for silver prices.

By Roland Watson
http://silveranalyst.blogspot.com

Further analysis of the SLI indicator and more can be obtained by going to our silver blog at http://silveranalyst.blogspot.com where readers can obtain the first issue of The Silver Analyst free and learn about subscription details. Comments and questions are also invited via email to silveranalysis@yahoo.co.uk .

Roland Watson Archive

© 2005-2022 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