Tell us where in the charts below there are any indications that the “true” value for gold should be in the $5,000 – $10,000 per troy ounce range, or silver in the $100 – $300 range. If you see extraordinary bullish signs within them, let us know, because we certainly keep looking and cannot find any needle in these “haystack” charts!
So says Michael Noonan (edgetraderplus.com) in edited excerpts from his original article entitled Gold And Silver – They Are Money!
[The following is presented by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com and www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
Noonan goes on to say in further edited excerpts:
Gold – Monthly Chart
The monthly chart reflects the makings for change, but the trend is still down. Forget about $5000 or higher gold, for now. It ain’t going to happen any time soon.
The breaking of a down sloping TL does not mean the trend has changed. All it means is that the trend has weakened. Price may have stopped declining, but it could spend many more months moving sideways, and not up, at all. Do not place much emphasis on such an event as a broken TL.
The bearish spacing has not been challenged. The current swing high rally failed to reach the $1420 -$1430 area, but developing market activity is showing a few clues that may prove more bullish than the market appears.
- Within the down channel, the December low stayed above the June low, and price did not even come close to the lower channel line. Instead, price held firmly within the channel and above the 50% portion of it, a sign of strength.
- From the December low, gold had a persistent rally for several days straight. March, last bar on the chart, has the look of a key reversal. A key reversal is when price makes a new recent high and then reverses to close lower than the previous bar. It can often be a red flag for longs. However, note the volume for March. It is the highest in 8 months, and it produced a lower close, ostensibly negative. It may turn out to be negative, but for now, our read is that the increased volume (effort) did not produce much in the way of results for a market in a down trend. Yes, the close is lower, but the low and the high are higher than the February bar, and the close did not even make it past the half-way mark of the prior range.
The overall chart is still negative, but within that context, there are these signs of potential change. If that were true, then the weekly chart should support this premise.
Gold – Weekly Chart
While the weekly chart is not bullish, it is less bearish than it has been, for price continues to move sideways and not down. However, the other bearish signs have not yet been compromised, like bearish spacing and the failure of the rally to extend closer to the last swing high.
On a positive note, the increased volume over the previous week, 2 bars ago, is a plus, as we read it. The range is slightly smaller than two weeks ago, so the increased volume did not produce as much as one would expect in a down trend situation. The effort of buyers for the last 4+ weeks was erased, but price did not fully erase the wide range rally 7 bars ago.
These observations are not anything in which to get overly enthused, but they are positive signs when sellers should be in total control.
Gold – Daily Chart
Just as gold rallied persistently during February and half of March, it has also persistently declined for 10 days, since the last swing high. Support can be anywhere from Friday’s low to the 1240 area, for now. The key, over the next few months, will be to see how far the next rally can carry, and then, how much of that rally gets corrected.
Silver – Monthly Chart
The demand for silver is much less than that for gold as silver continues to disappoint, at least for those of us wanting higher prices. The charts say otherwise. March is an inside month. It is hard to draw any meaningful conclusion from that, except to say the close is on the lower end, telling us sellers remain in control.
Silver – Weekly Chart
The picture does not get any better for the weekly chart, except to mention price is at important support, and the range for March is relatively small. The narrower range tells us buyers are meeting the effort of sellers and preventing price from continuing lower. It could lead to a rally, next week.
Silver – Daily Chart
Price put in its first higher close in 9 trading days, and even the volume increased. It is not a game changer, but when all else appears negative, a little light shows up.
It is not a positive sign that the current decline has intruded as far into previous support as it has. It is a sign of weakness that buyers are not defending support very well. Also, the breaking of the lower channel line puts silver into an oversold condition, and oversold became more oversold.
For every valid reason that so many others are advocating the purchase of physical gold and silver, demand, shortages, Chinese buying, exchange disappearing physical, etc, etc, we echo those sentiments and suggest/advise to keep on buying, but hold it personally. However, for more salient reasons, such as discussed in our last several commentaries, as well as this one, there are far more important reasons to buy and hold gold and silver – they are money.
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
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