1. Personal Note
As you surely have realized I did not publish any analysis in english for more than one year.... I am sorry for this but I experienced some big personal changes in my life as I got married last summer... After that I had to focus on my priorities and investing a lot of time and energy to write my free bi-weekly newsletter in english was obviously not one of them.
The good news is that I now decided to come up with a short update in english as often as I can or when I feel the market might do an important move.
Besides that you can follow my bi-weekly Gold & Silver edition in german here: http://www.proaurum.de/home/infos/chartanalyse.html
2. Update
Negative:
- Candlestick topping pattern (shooting star after a strong uptrend) on the gold & silver chart. A Shooting Star sends a warning that the top is near. It got its name by looking like a shooting star. This pattern usually presents itself as a sign of a short term correction rather than a more potent reversal signal.
- Oil (-10%) & CRB (-7%) already heavily down
- Wheat sideways since end of July
- Corn down 13% since highs in mid of August
- Platinum & Palladium both already corrected back to the middle Bollinger Band
- VIX at record lows. Shows extreme complacency in the stock market
- Solution & settlement in South Africa brings 22% salary increase & end of strikes
- COT structure very very bearish (especially silver). Commercials own biggest short position in the last 12 months.
- October often sees a wave of profit taking in precious metals
- EUR/US$ situation still unclear. Either a new uptrend for the Euro has started and we are seeing the first correction after an impressive rally. Or this was just a relief rally and the US-Dollar will mark new highs in the coming months. I tend to believe we are in a new uptrend for the Euro but markets will tell. Anyway, we are now in a correction of latest rally that could retrace 50.00-61.80%. US-Dollar strength is generally bad for stock markets, commodities and precious metals.
Positive:
- RSI still embedded in gold & silver
- RSI still embedded in USD
- Monthly Bollinger Band offers more room to the upside. Currently US$1,843.50
- New uptrend in precious metals that should carry gold up to US$1,880.00-1,920.00 until end of the year or spring 2013.
- Seasonality until spring very promising.
- Never fight the FED. Unlimited QE -> money printing all over the world will push prices in all sectors higher...
Action to take:
- Hold any physical position through this expected setback
- Hold any paper position with leverage smaller than 3 through this expected setback. Gold will move to US$1,900.00 within the next couple of months!
- Tighten stop loss of any paper gold/silver position with leverage bigger than 3. Immediate and important support is US$1,755.00. If it breaks correction is confirmed.
- For very speculative experienced and short term traders: short gold into any strength towards US$1,780.50 on monday. Stop loss has to be around US$1,787.50. Hold short position during correction down to US$1,720.00 - 1,715.00. I expect at least a test of the middle Bollinger Band in the daily chart.
Long term:
- Nothing has changed
- Precious Metals bull market continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
- Price target Dow Jones/Gold Ratio ca. 1:1
- Price target Gold/Silver Ratio ca. 10:1
