The charts say to expect more turmoil in the coming days and weeks as the Brexit fallout settles in and sorts matters out. The key for gold and silver owners is to wait for clearer and less riskier opportunities that will arise in the weeks ahead. Owners and holders of physical metals are seeing their holdings improve, and over time, they will improve even more. We all know it is not “if,” but when. Each passing month gets us closer to the elusive and unknown “when.”
The comments above and below are excerpts from an article by Michael Noonan (EdgeTraderPlus.com) which has been edited ([ ]) and abridged (…) to provide a faster and easier read.
If we knew when, we would say… It could be that we are already in the “when” window of time, but it cannot be confirmed until after the fact.
Gold – The Weekly Chart
The two dark horizontal lines on the weekly gold chart [below] are previous failure highs that will offer resistance at some point in the future. The April failed swing high stopped at the January 2015 similar high failure. Friday’s panic buying in gold saw the next level tested, the June 2014 failed swing high. Gold has rallied $150 in the past month. Some backing and filling would be healthy for this market.
The exceptionally wide range for the week may lead to more of a sideways trading affair. It is harder to define paper risks during these times. For physical purchases, we see no risk. You own it. No one can take to from you or devalue it. An ounce of gold is always an ounce of gold. It is measured by fiat pieces or paper. Remember, when gold goes from $1,200 to $1,300, in dollar terms, it did not go up in value. Instead, the number of fiats increased by $100 in order to purchase that same ounce that has not changed.
It is ironic that many say there is already a bull market in gold when measured by the Euro or the Pound, for example. No. The fact that it takes more and more Euros or Pounds to buy the same ounce of gold is an acknowledgement that the fiat paper has lost more of its perceived imaginary value. An ounce of gold remains unchanged. It is the deteriorating s0-called “value” of fiat currencies that have worsened economic conditions.
Keeping things simple in the current world of chaos, let those who choose to deal in bureaucratic whim, [which also defines what a fiat currency really is], try to justify the unreal as having value. It is an exercise in futility, a fact Precious Metals holders have known beyond question. The EU “emperors” are wearing no clothes, and the British people just acknowledged it in their vote. All of the enormous disruptions in the markets are an attempt to reconcile people’s reality and what they want for themselves against political deceits by those in control in order to get what they want, always at the expense of people.
Gold – The Daily Chart
The price adjustments reflect the push-pull of people vs. politicians, and the range [see chart below] between the more recent spike high, at 1362, and the low, at 1262, is most likely the range where the struggle for control will evolve. This risks are available to anyone, every day. The opportunity for profit is not available every day, at least not without having to take undue risk in the process. We choose to wait for the opportunity that arise less frequently.
Silver – The Weekly Chart
We still see silver outperforming gold, in the future. The chart structure is better for gold than it is for silver yet the gold:silver ratio has come in from 84:1 down to 74:1, +/- on any given day. This means silver is outperforming gold on a relative basis. We have no specific target, but the probability grows that the gold:silver ratio can come in to 40:1, 30:1, 20:1. The historic relationship has been 15:1, so that is not out of the question.
Silver – The Daily Chart
We showed how the previous wide range bar on increased volume established a price range for silver (seven trading days ago). Friday [see chart below] produced an even larger range. No horizontal lines were drawn to not confuse the matter. Now, the expected range within which silver may trade in the days, weeks ahead is 17.10 +/- on the low side to 18.37+/- on the high side. It is questionable if any tradable opportunity will arise within that relatively narrow range, so patience is the guide for the immediate future, unless one is buying physical silver. For the physical, the time to buy is each and every time you have the available funds to commit toward stacking, and one can never stack too high.
Last Friday, you witnessed exactly what happens to paper assets when people lose confidence and panic. You also witnessed a preview of what is yet to come: days of gold rallying $100, silver $1. There will be more of those days, and even in greater gains. Keep buying and personally holding physical gold and silver.
Disclosure: The above article has been edited ([ ]) and abridged (…) by the editorial team at munKNEE.com (Your Key to Making Money!) to provide a fast and easy read.
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