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Zeke-Dog has been following the markets for over 18 years. His interests are following current political and environmental events where he develops a macro economic view of the markets. He has also been a student of technical analysis for over 15 years.
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  • My Bullish Take on Gold and Silver 2 comments
    Aug 28, 2010 8:18 PM | about stocks: SLV, GLD

    Based on my technical analysis of the GLD and SLV charts, I believe that gold and silver are ready to break out out to new highs. As you can see on the below charts, both the GLD (Gold ETF) and the SLV (Silver ETF) are  in the last stages of long term cup and handle formations that started developing in the beginning of  December of 2009. These patterns are very bullish and should take the metals much higher in the next few months.

    The charts confirm the seasonality of the two metals that are now leaving the summer doldrums and heading into the month of September, which is historically a very strong month for the metals.

    Politically the Fed has recently announced another round of quantitative easing, and Bernanke stated in Jackson Hole the Fed is prepared to do even more to pull this economy out of a possible double-dip recession. This means more bouts of money printing in the near future.

    Many financial experts, who a few weeks ago were touting that we were out of the recession, are now talking about a double dip recession. The stock market looks weak and everyone seems to be rushing into the "safety trade" of US Treasuries. The bond market looks like it is beginning to form a bubble and I am afraid those putting their money in that camp are going to get wiped out.

    The smart money seems to be going into precious metals, therefore we should see some follow through to the upside in Gold and Silver. If the bond market bubble should burst, the metals will go parabolic because they will be the only safety trade left in the currency market. Watch for some very impressive moves to the upside in Gold and Silver.
    Daily Chart of GLD - ETFDaily Chart of SLV - ETF

    This is my take,


    Disclosure: Long Gold and Silver
    Stocks: SLV, GLD
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  • xpan
    , contributor
    Comments (862) | Send Message
    Seek Alpha posts a lot of articles, which is good. Unfortunately, most of these articles don't have high quality. This is one of these poor quality article. I am bullish on gold, for different reasons.
    1. The article says that gold is bullish technically. But it doesn't address a common concern that the momentum is diminishing.
    2. The article says that gold is bullish seasonally. But it doesn't say that jewellery sale now becomes a small portion of the gold demand.
    3. The article says that Fed recently announced a new round of QE, which is not true. A mini QE is the best it can be said about.
    29 Aug 2010, 10:46 AM Reply Like
  • Zeke-dog
    , contributor
    Comments (136) | Send Message
    Author’s reply » xspan,


    Just like any article on gold or silver it is impossible to write about every aspect of the market and all the dynamics that are driving it at the time. Otherwise instead of an article it would be a book.


    This article is about my bullish views on bullion not bearish reasons it can go down. Otherwise I would have chosen a different title.


    Your comments on diminished momentum, lack of jewelery sales and the Fed not announcing QE tells me don't have much of a handle on the bullion markets.


    I do not agree that momentum in bullion is diminishing. In fact if you look at the bullion sales from dealers across the country, business has never been better. Even better in other countries such like China and Russia.


    Your comment about the Fed not coming out with more QE. I think you are unfortunately ignorant on the issue. They don't call him "Helicopter Ben" for nothing. Do not kid yourself, there will be more QE because that is the only answer the Keynesian theorists have left and it is very bullish for gold.


    All I can say is time will tell. I believe GLD will hit new highs between now and mid October and SLV will break the $20 level in the same time period.


    I hope you will keep this post in mind and we will see who is right.
    30 Aug 2010, 11:15 AM Reply Like
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