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Silver Update: Is Silver Outperforming The Gold Fractal?

Below, is an extract of my Silver Premium Update for 25 January 2012:

Since my last silver articles (here and here), the silver chart has been following the patterns, I have been tracking, quite nicely. Below is an updated version of the gold vs. silver fractal:

gold vs. silver fractal

I have highlighted the patterns (marked 1 to 10) on gold and silver to illustrate how they are similar. It seems that silver is now just past point 12, and it has broken out at the blue downtrend line. If it follows the gold pattern exactly, it will move along in the channel formed by the two brown lines, just like gold did. If this happens, we could still wait a long time before the $50 level is challenged.

Below, is another comparison between gold and silver to put the above in perspective:

XAG/USD Spot Price

Here, I am comparing the same patterns, but I am just including a longer timeline before and after. I have marked the two patterns (of the previous chart) with points 1 to 5 (different numbering than before). I have also drawn a blue line where the top of the ascending triangle (as per previous article) was - just to give us perspective.

So, like I said before, if silver is to follow the gold pattern exactly, it would follow the red drawing, which would mean, it could take a very long time before we pass the $50 with some momentum. Based on the comparison of silver, to its 1970s pattern (as per prior article), we could follow the green drawing. This could mean we could pass $50 much sooner.

Currently, I expect it to form something more like the green drawing; however, we need to see some evidence of that over the coming weeks. This means that there should be acceleration in the silver price, as compared to the gold chart. The first thing that needs to happen (I think) is that price needs to break out (and stay out) of the channel (formed by the two brown lines) in the first chart.

This kind of thing did happen before, as you will see from an extract of my October 2010 Premium Update, below:

Silver Chart

As per that update, if silver was going to follow gold exactly, it would have taken a long time before it broke out of that upward trending blue line. However, there was acceleration in the silver price, as compared with gold, and it ended up breaching the upward trending blue line, much faster than the gold pattern suggested.

"And it shall come to pass, that whosoever shall call on the name of the Lord shall be saved"

 


For more of this kind of analysis on silver and gold, you are welcome to subscribe to my free silver and gold newsletter or premium service. I have also recently completed a Long-term Silver Fractal Analysis Report.

 

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