1. Personal Note
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2. Update
Reasons for lower prices:
- US$1,790.00 (Gold) and US$35.00 (Silver) continue to be strong resistance
- MACD, RSI & Volume did not confirm new intraday highs
- possible bearish wedge developing in the Gold chart
- Sideways action since 16 days with high volume could be interpreted as smart money distribution
- Silver is loosing momentum and did not do as good as gold recently
- Gold & Silver Ratio caught in between 51-52 and is moving sideways
- COT structure now even more bearish. Commercials own biggest short position in the last 16 months!!!!!
- Sentiment readings 3rd week > 80% bulls
- October historically worst month for gold (Gold usually hits a low just as the Hindu festival of lights "Diwali" starts which is 13th of november this year)
- CRB Index is making lower highs & lower lows recently
- VIX at record lows. Shows extreme complacency in the stock market (Apple has negative divergence in RSI & looks vulnerable)
- Small Caps and Technology are showing relative weakness
- Oil prices are down more than 10% and Gold/Oil ratio shows that Gold is expensive compared to Oil
Reasons for higher prices:
- Gold & Silver are still close to their highs, any setback is bought immediately
- Expected correction ended at the middle Bollinger Band (V-Formation gives a price target for Gold around US$1,840.00)
- Slow Stochastic in the daily gold chart embedded again
- Slow Stochastic in the weekly gold chart still embedded (= very strong uptrend)
- Strong rebound in EUR/US$ is bullish for metals
- Point & Figure Chart still very bullish (reversal with a daily close below US$1,555.00)
- Strong Support for Gold at US$1,770.00/ US$1,750.00/ US$1,735.00
- Bollinger Bands going sideways & moving closer together (=new pressure building)
- Monthly Bollinger Band offers more room to the upside. Currently US$1,847.41
- New uptrend in precious metals since august 2012 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 asset prices in all sectors higher...
- FED might want to keep the markets up until presidential election
- New strikes in South Africa reduce supply
- very instable and dangerous situation in Syria/Turkey.
- Iran is accelerating towards hyperinflation (black market rate for Iranian Rial is down 65% since July 2010 against USDollar)
Conclusion:
- Either strong correction will start within the next couple of days and bring Gold down to 50 MA (US$1,691.89)
- Or we will first see a final move up to around 1,845.00 before Gold will start a nasty correction
- Tighten stop loss of any paper gold/silver position. Immediate and important support is US$1,770.00 and US$1,755.00.
- This is not the time to establish new long positions.
Longterm:
- 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
