Gold and Silver About to Hit Resistance 20 comments
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Since my last bullish call on silver, the precious metal has indeed gone up but something else has caught my eye, which I feel that the people who are keeping an eye on silver (and gold) should know about, if they don't know it already.
Both gold and silver are nearing a resistance line and it looks like a strong selling point unless the US dollar lends a helping hand by continuing its decent. I admit that I am not an expert on currencies, hence I don't have a strong enough conviction on which to make a prediction as to what will happen to the dollar. The basics support a further drop in the dollar, but as the previous months have shown us, a fundamental weakness in the dollar might not be enough to materialize into actual losses.
One of the reasons was a flight to safety (purchase of US government bonds due to the fact that other economies/currencies were doing even worse), but some "credit" has to be given to the chairman of the Federal Reserve, Mr. Bernanke.
In the end, whatever personal angst you might have against Geithner, Bernanke or Obama, bitching and moaning over it won't help. You just have to figure out how to put those factors into work for you so that the next time they make an announcement, you will know how to react. One important thing to keep your eye on is quantitative easing. The next FOMC meeting release is due in June.
Right now, keep your eyes fixed on the dollar. If it shows any signs of long term weakness, silver and gold will definitely benefit. But you will also have to take into account the resistance lines.
Silver $14.01
- support at $12.50
- resistance at $14.60
Gold $926
- support at $900
- resistance at $930
Disclosure: No positiions.
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This article has 20 comments:
Thanks for pointing that out!
If you want to know more about resistance, then google the following: technical analysis resistance
Thus I suspect market intervention by the ECB. Just how they are doing it I am not sure but you have to admit the ECB has plenty of reason to force this prices into a trading range and all of your technicals are useless.
u r forgiven, now proof read stuff, I know u are in touch, but get some rest and take a day off. then come tell us what to do
LOL
Capt B
On May 14 06:32 AM Kristjan Velbri wrote:
> My bad. I'm really sorry for that. I just had a lot on my mind yesterday
> (and I finished the article around midnight). $960 it is.
> Thanks for pointing that out!
Chinese buying of gold. China is buying gold as part of their
strategy to eventually make the yuan be the world's reserve
currency, or at least Asia's and Oceania's reserve currency.
Maybe this trend will trump other central banks efforts to manage
the rise of the gold price at some point in time, just not anytime soon.
On May 14 12:29 PM Kristjan Velbri wrote:
> David, the charts above show the price of silver and gold futures
> contracts as determined on the futures markets (like COMEX, which
> is part of NYMEX). The price of these metals is influenced by central
> banks, large commercial banks and technical analysis. The days when
> gold and silver were priced according to their actual worth and demand
> on the market are long gone. Some say these times are coming back
> but I wouldn't bet on it. Of course, it would be nice to have money
> with actual collateral.
> If you want to know more about resistance, then google the following:
> technical analysis resistance
It comes down to the economy. If we find proof the recession is ending soon, gold goes down. If we discover it's actually a Depression and we're NOT getting out anytime soon, gold goes way up.
I'd factor technical indicators like these into my decision-making if we were in a relatively mild market with few strong directional indicators coming from the economy and the money supply. In times like this, though, I think the use of resistance lines is misleading, and I certainly wouldn't build an argument off them.
How strange ... once I go to that website, it actually debunks the notion that such gold and silver manipulation is occurring ...
"As a quick housekeeping note, many of you have written to me about reports of big COMEX call option buying in gold and silver, by JPMorgan and Goldman Sachs. While I think it is possible that there has been buying in gold and silver mining shares and perhaps in the OTC market, there has been no evidence of such option buying on the COMEX, according to public data in the COT and Bank Participation Reports. If there were such buying on the COMEX, it would be reflected in these public reports."
www.investmentrarities...
On May 14 06:54 PM 5142152-337 wrote:
> Spartacuss: What you are witnessing is JPMorgan among others MANIPULATING
> the gold and silver market! Read Ted Butler @ butlerresearch.com
> It will be enlightening and you will learn a lot.