Most Popular
1. THE INFLATION MONSTER is Forecasting RECESSION - Nadeem_Walayat
2.Why APPLE Could CRASH the Stock Market! - Nadeem_Walayat
3.The Stocks Stealth BEAR Market - Nadeem_Walayat
4.Inflation, Commodities and Interest Rates : Paradigm Shifts in Macrotrends - Rambus_Chartology
5.Stock Market in the Eye of the Storm, Visualising AI Tech Stocks Buying Levels - Nadeem_Walayat
6.AI Tech Stocks Earnings BloodBath Buying Opportunity - Nadeem_Walayat
7.PPT HALTS STOCK MARKET CRASH ahead of Fed May Interest Rate Hike Meeting - Nadeem_Walayat
8.50 Small Cap Growth Stocks Analysis to CAPITALISE on the Stock Market Inflation -Nadeem_Walayat
9.WE HAVE NO CHOICE BUT TO INVEST IN STOCKS AND HOUSING MARKET - Nadeem_Walayat
10.Apple and Microsoft Nuts Are About to CRACK and Send Stock Market Sharply Lower - Nadeem_Walayat
Last 7 days
AI Tech Stock PORTFOLIO NAME OF THE GAME - 29th June 22
Rebounding Crude Oil Gets Far Away from the Bearish Side - 29th June 22
UK House Prices - Lets Get Jiggy With UK INTEREST RATES - 28th June 22
GOLD STOCKS ARE WORSE THAN GOLD - 28th June 22
This “Bizarre” Chart is Wrecking the Stock Market - 28th June 22
Recession Question Answered - 28th June 22
Technical Analysis: Why You Should Expect a Popularity Surge - 28th June 22
Have US Bonds Bottomed? - 27th June 22
Gold Junior Miners: A Bearish Push Is Coming to Move Them Lower - 27th June 22
Stock Market Watching Out - 27th June 22
The NEXT BIG EMPIRE WILL BE..... CANZUK - 25th June 22
Who (or What) Is Really in Charge of Bitcoin's Price Swings? - 25th June 22
Crude Oil Price Forecast - Trend Breaks Downward – Rejecting The $120 Level - 25th June 22
Everyone and their Grandma is Expecting a Big Stocks Bear Market Rally - 23rd June 22
The Fed’s Hawkish Bite Left Its Mark on the S&P 500 Stocks - 23rd June 22
No Dodging the Stock Market Bullet - 23rd June 22
How To Set Up A Business To Better Manage In The Free Market - 23rd June 22
Why Are Precious Metals Considered A Good Investment? Find Out Here - 23rd June 22
UK House Prices and the Inflation Mega-trend - 22nd June 22
Sportsbook Betting Reviews: How to Choose a Sportsbook- 22nd June 22
Looking to buy Cannabis Stocks? - 22nd June 22
UK House Prices Momentum Forecast - 21st June 22
The Fed is Incompetent - Beware the Dancing Market Puppet - 21st June 22
US Economy Headed for a Hard Landing - 21st June 22
How to Invest in EU - New Opportunities Uncovered - 21st June 22
How To Protect Your Assets During Inflation - 21st June 22
AI Tech Stocks Current State, Is AMAZON a Dying Tech Giant? - 20th June 22
Gold/Gold miners fundamental checkup - 20th June 22
Personal Finance Tips: How To Get Out Of A Tough Financial Situation - 20th June 22
UK House Prices Relative to GDP Growth - 19th June 22
Will Global Markets Be Pushed Deeper Into Crisis Event By The US Fed? - 19th June 22
Useful Things You Need To Know About Tweezer Top Candlestick Pattern - 19th June 22

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Prices To Benefit from the Golden Cross

Commodities / Gold and Silver 2012 Oct 02, 2012 - 03:52 AM GMT

By: Bob_Kirtley

Commodities

Best Financial Markets Analysis ArticleThe anticipation and advent of QE3 has filled the precious metals market champions with considerable optimism. Gold and silver have both steadily, but firmly moved to higher ground.


Taking a quick look at the chart we can glean a few simple trend changes. The first one is that silver’s downtrend that has been evident for the last 15 months or so, has been well and truly broken with silver rallying from around $26.00 to close today at $34.95. We would also draw your attention to the 50dma which is in the process of swinging through the 200dma in an upward movement, thus forming what is commonly known as a golden crossover. This recent rally and the golden crossover suggests that silver prices are going higher and are usually positive for silver. The canary in the coal mine is however, the position of the technical indicators, which suggest that silver is now overbought and as such should experience a pull back or at least a short period of consolidation. The RSI, MACD and the STO look to have peaked and are now heading south.

Overall we expect silver prices to continue in this multi-year bull market for precious metals and to set new all-time highs in the near to medium term. A $50.00 price tag before the end of the year is a real stretch; however, it is not impossible. The easing of monetary policy is now the order of day for the major nations who are faced with rising unemployment and stagnating economies. We see stagnation as a real problem going forward, without economic activity and growth, the tax receipts will be a lot lower than governments are anticipating and a fall in revenue is something that will give them nightmares. Should this period of stagnation persist and if the inflation monster was to raise its ugly head, then we would have to endure a period of stagflation which is really the worst of both worlds.

We would also draw your attention to another negative in that the overall sentiment would appear to be flat, as the general public remains disinterested and oblivious to the on-going debasement of their currency. This lack of interest is understandable as the same public is pre-occupied with a myriad of other issues that are far closer to home. Employment and future job prospects take center stage, followed by rising food and gasoline costs.

In the long term this is bullish for silver as when the public at large realize just what is going on they will move on mass into the precious metals sector causing an enormous bubble. A similar thing happened back in the eighties when silver and gold entered into the mania phase of the bull market. Will it be different this time you ask? Oh yes it will. There are many more market participants now than there was then so the upward pressure on prices will many times greater and prices will go through the ceiling.

Just to re-cap, on July 5th 2012, we penned an article entitled: ‘The Next Time Silver Crosses $30.00 will be the Last Time’ on that day silver was languishing at $27.67 as the summer doldrums offered little in the way of positive action. So, with silver prices now trading above $30.00 we have our necks well and truly on the chopping block. A lot can happen to take silver back down again and I guess our biggest worry would be interference from the regulators in that they can alter the margin requirements. This would cause some of the speculators to dispose of some of their holdings and thus put downward pressure on silver prices. If this were to occur we can only hope that the selling would be short lived and normal service would be resumed, as they say.

In the July article we also wrote the following; to conclude we politely suggest that you accumulate as and when you can and that you do not sell any of your physical silver bars or coins, you might be just offering someone else a real bargain. We hope that you did manage to ignore the naysayers and that you continued to buy throughout the summer. We are quietly confident the silver prices are headed are much, much higher and that we will all be rewarded for patiently accumulating physical silver.

Having recognized that the stocks were underperforming the metals, we switched our focus to trading options in order to get some leverage to the gyrations in the precious metals sector. This is not a strategy for the fainthearted, neither is it to be feared if you adopt a disciplined and conservative approach to each trade. The old adage still applies here that you should never fall in love with a trade, no matter how confident you are of it being a rip roaring success.

Stay positive, think precious metals, and avoid the folding stuff.

So if we have stimulated your interest then please feel free to add your comments as they help to stimulate and widen the debate, thanks.

Have a good one.

Bob Kirtley
Email:bob@gold-prices.biz
URL: www.silver-prices.net
URL: www.skoptionstrading.com

To stay updated on our market commentary, which gold stocks we are buying and why, please subscribe to The Gold Prices Newsletter, completely FREE of charge. Simply click here and enter your email address. Winners of the GoldDrivers Stock Picking Competition 200

DISCLAIMER : Gold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.

Bob Kirtley 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