[As outlined in this article,] there are no reasons to buy paper gold or silver. [That being said,] the reasons for buying and holding physical gold & silver are more compelling than ever, and we expect those reasons to become even more compelling.
U.S. Dollar Index
…While nearing recent highs, the market is not internally strong. If a new high is to be had, it could be short-lived, but this is not an interpretation for picking a top, just seeking context in this fiat.
…There is a growing likelihood that…[there] could be the start of a base or rapid turnaround rally in oil. If a base, a nominal lower low is possible, but price may find more support at current levels.
…Absent a surprise sustained rally, gold is not indicating a turn around in its current down trend. It is at an area where some basing can be expected, but there is not sufficient positive activity to say it is happening.
…The daily activity supports what the weekly chart above shows in potential weakness. For the paper market, it is too risky to pay up and buy into a rally, at this early stage. We need to see more evidence that buyers are gaining control.
Sellers have ceased making any meaningful gains lower in silver, not surprisingly given the ultra bullish fundamentals, and that may be the reason. However, we read charts without consideration to underlying fundamentals. The premise is all considerations have already been taken into account, is a known factor, and has been priced in. For as little downward direction sellers are making, buyers are totally unable to take advantage and push price higher. Until you see such change where rally bars have a wider range and strong closes on strong volume, silver remains stuck at these levels.
We look for synergy between the various time frames, and the weekly [chart below] supports what the monthly chart conveys. There has been no meaningful rally over the past three months, and price remains well under a 50% retracement, a general guide to lack of market strength.
All three time frames tell the same “story” of weakness, an inability to rally above TR resistance. Trading ranges are hard to analyze, so we leave this one alone, other than to reiterate it stems from weakness and shows no internal strength.
There are no reasons to buy paper gold or silver. The reasons for buying and holding physical gold and silver are more compelling than ever, and we expect those reasons to become even more compelling. Price is irrelevant and way, way undervalued.[The original article as written by Michael Noonan (edgetraderplus.com) is presented here by the editorial team of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here – sign up in the top right corner) in an edited ([ ]) and abridged (…) format to provide you with a fast and easy read.]
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Each of the following charts on gold and silver contain their own message related to price volume behavior that has a convincing element of reason… See if you agree.
For all the information the following charts convey, it is not unfair to suggest price is likely to go lower, nor it is unfair to expect anyone armed with this knowledge to be disappointed that gold and silver are not going higher, for now.