There has been an ongoing cleansing in the precious metals market since the spike highs 5 years ago…[in spite of] calls for a massive turnaround in prices for both gold & silver in 2013, in 2014, and again, and even more so in 2015 and 2016, yet the “cleansing process” is still ongoing, tiring out the masses who had been certain that gold & silver would soar to $5,000+ and $200-$300, respectively, even as the metals continue to flirt with their lows from a year ago.
The comments above and below are excerpts from an article by Michael Noonan (EdgeTraderPlus.com) which has been edited ([ ]) and abridged (…) to provide a fast & easy read.
What Are the Charts For Gold & Silver Showing?
Charts can be confusing, at times, but they never lie…We reference them to the exclusion of what people say….[because] charts show what people actually do. Charts are most reliable when there is synchrony with the various time frames, and we see this in the three time frames: Annual, Quarterly, and Monthly.
The position of the price of gold remains near recent lows and well under the 50% retracement level. The half-way mark is a general guide to measure the “health” of a market. For Bears, price being well under the 50% level means Bears are comfortable with their positions. For Bulls, being so far under that level indicates weakness with no signs of a turnaround…
Gold: Monthly Chart
The takeaway message from the longer term timeframes is that gold remains weak; whether it has bottomed or not lacks confirmation, so one should not expect an immediate rally to the upside. An economic shock of some kind could cause price to rally sharply, but that would be an anomaly, at least as to timing. Under so-called normal market conditions, it appears that the bottoming process for a turnaround could last a few more years and the same commensurate time frames for Quarterly and monthly activity.
The weekly chart below is just as weak as the higher time frames. What becomes more interesting for the weekly, and it is even truer for the daily charts, is this is where one will begin to see the first signs of a change in trend.
The 2013 break of support occurred on sharply higher volume, and there was further continuation, not quite the way the daily silver chart has developed, as will be seen in the last of these charts. Shown is the consolidation at the December 2015 lows. Compare that development with previous lows on the chart. Once price rallied away from the lows, that level is now being retested from mid-December. When we say something needs to be confirmed by a successful retest, this is a perfect example. Should the retest hold, we will be seeing the first potential signs of a change in market behavior that can lead to a change in trend. Keep in mind, market bottoms can be very protracted, and the higher time frames are not indicating a change any time soon.
The extreme volume in November is occurring near recent market lows, as opposed to much higher levels. Because the high volume is near lows, it gives credence to assessing the high volume as a change from weak-handed sellers into stronger-handed buyers. It takes time for strong hands to accumulate positions, and it is nearly impossible to buy all they want at the lows, so they buy fairly close to where they believe, if not know, where price will hold.
This fits with the assessment that there could be some bottoming in the longer term charts that are still way too soon to consider, at least for timing. It is the smaller time frames that are used for timing.
Gold: Daily Chart
Below is a daily contract for the Feb futures contract….It is much too soon to say the mid-December lows may hold, but they may, in fact, hold. If there is to be a change in trend, this is where it will show up on the daily, long before any change shows on the monthly and higher time frames. Still, even on this lower time frame, (actually any time frame), one move needs to be confirmed to be proven reliable.
Gold prices may hold in around current levels. It would seem price rallies may become more prevalent than declines, and if this is a bottoming area, declines should be narrower ranges and shorter lived, but that is merely an opinion, and opinions do not matter. The market is always the final arbiter.
Silver: Monthly Chart
There is a similar pattern in silver as there was for gold. Price hovers near the lows and well under the 50% retracement measure. The close for 2016 on the Annual bar is near the low, but it is also above the closes of the prior two years. Plus, the close for 2015 was on the low which can be exhaustive selling and trapping sellers in that area.
The 3rd Qtr bar, second to last, was a small range that stopped the rally, and the close was nearer the low of the range. This tells us sellers were stronger than buyers. We see evidence of that by the ease of selling for the 4th Qtr of 2016. Yet, the low for the 4th Qtr remained above the low of the 2nd Qtr rally. It is worth being aware of these distinctions in case the character of the market changes in order to be better prepared.
The monthly chart is currently retesting the December 2015 lows. The activity from the 2015 lows are legitimate supports, even going back to early 2010, the last low before the huge rally to the $50 high. This makes the current lows key as potential support.
Silver: Weekly Chart
The weekly developing market activity is sufficiently explained on the chart below. It helps to draw in the thin lines marking swing highs and lows to cut out the “noise” in between. It is easier to see how each successive low after the swing highs, beginning at 1, became shallower and shallower. Each drive lower made relatively less headway. Even the rallies to the swing highs were shorter, both in distance and duration. You get to see the nature of the market change in real-time.
The final low, after the swing high at 4, was a sideways consolidation, a message that sellers had expended their effort. That was confirmed by the rally to HH, a Higher High that exceeded 3 and 4. This marks a change in the character of the market and becomes an alert for a potential trend change. It needs to be confirmed by a higher low, which is now in progress as you read current price activity.
Silver: Daily Chart
We alluded to potential signs of change on the higher time frames, and now we see more evidence on this lower time frame. Yet, if there is to be a change in the weekly chart, it will show up on the daily chart, first.
Looking back at the daily gold chart below, the high volume sell-off led to further downside continuation. In silver, the high volume sell-off resulted in a sideways move which did lead to another low in December, but the downward movement was more controlled.
None of the charts are calling for a change in trend. There is no reason to be long in the manipulated paper futures market. There is every reason to be buying both physical gold and silver. All Western banks are bankrupt, totally underwater, being propped up by the IMF and a few bail-ins. There is more debt than ever in the world, levels of debt that cannot be sustained for forever. Circumstances, greatly manipulated by the globalists, ensure a change in trend will come.
We are near the end game where reality will make its presence known and the fragile world of Western governments, fiat currencies, stock markets, anything paper, will be destroyed. The globalists are preparing for it, in fact, ensuing that it happens. Nothing can or will stop the global moneychangers from their economic stranglehold on people everywhere.
Cash will disappear, as bankers continue to wage war on it. Can a war on owning gold and silver be far behind? Probably not. If you do not own, and hold, physical gold and silver, the opportunity to protect your economic viability may disappear for generations to come.
Do not listen to the lies of the bankers and the governments they control (all). Trust in the proven history of the only true money, gold and silver. The charts say there is still time to buy, but any event can trigger a panic and the physical metals will not be had at prices people can now afford.