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

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

© 2005-2022 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