It really matters little what the charts are saying about the paper futures for gold and silver here, which we will get to shortly. The focus needs to be kept on a few facts that are inescapably true: fiat currencies throughout the history on this planet have always, always failed, without exception, 100% of the time. There are few situations for which such a statement of guaranteed [failed] performance can be made.
It is any different this time? Yes and no. No, because all fiats have failed, plain and simple. Yes, because the extent to which there is no reasonable reality in the relationship between paper and physical has never occurred to the current degree, ever.
In times past, gold and silver were used as a form of money somewhere in different parts of the world, but not today. The Rothschild system of controlling the supply of "money" has been honed to [im]perfection where the world is dominated by the moneychangers, the entire world. It is fiat, fiat, fiat. No country trades using gold or silver as true money. The moneychangers, the globalists have driven gold and silver out of everyday existence, physically, to a large degree, psychologically to an even greater degree.
In 2013, those calling for a change in the price direction for gold and silver for that year or at least into 2014, were proven wrong. If not by 2014, then surely big changes would occur in 2015. These expectations were being made by some of the smartest and most respected individuals in the PMs community.
Surely the reality of shrinking supply and unabated demand would prevail over the specter of unimaginable fiat production and phony central banker QE-to-infinity measures would mark 2015 for much-needed change in the failing world-wide financial system predicated on the privately controlled and managed Federal Reserve Note, commonly and mistakenly called the "dollar." One can legitimately question if any change will occur in 2016, at this rate.
The two things guaranteed in life have been death and taxes. We add a third, the guaranteed failure of paper fiat. When! When! When will the current fiat fail? There is no known answer for that.
When will your life end? There is also no known answer for that, either, other than the guarantee that it will. Knowing you will one day die, does it stop you from living each day, each year as though life will continue? It seems most people live their life that way. While tomorrow is promised to no one, few expect that promise to arrive today or tomorrow, although it happens regularly throughout the world as people die every day. Many make plans for their eventual death, in a variety of ways, family planning, estate planning, etc, but the hope is almost always that life will be extended for as long as possible.
This is the best analogy we can give for when the current fiat will fail, and it seems to be an apt one, just in reverse. People want to see the death of the "dollar," indeed all fiats, in favor of returning to some kind of gold standard. When that happens, those who have been buying and holding gold and silver over the years will see an increase in their wealth holdings.
You know death is inevitable, but you endeavor to live life to the fullest as best you can. In the same vein, you know fiats fail, but not knowing when is less acceptable in that realm of the inevitable than not knowing when death will inevitably occur in life. Still, one must plan for the purchase of physical gold and silver regardless of when the fiat will fail, as it will, and the current extraordinary circumstance, where the reality of supply and demand ceases to function, makes the ongoing purchase and holding of PMs more important than ever.
It is possible gold can still decline to 1,000 to 865, and silver to 12.50 to 11.70. The probability remains greater than not, but a decline to those levels is no more a guaranty than death or taxes. When the value of PMs do turn around and attain higher prices, more reflective of reality in the "unreal" world of fiat in which we live, having paid $1,800/oz, $1,200/oz, or $900/oz for gold, $50/oz, $35/oz, or $10 oz for silver will not be of much consequence if the pricing for gold and silver should reach 5 or tenfold multiples, or more, from current levels.
Those who already own gold and silver will stop complaining at those higher price levels. That means anyone purchasing the metals at current prices, even if price continues lower over the next year, will be owning one of the world's most reliable wealth assets at extraordinary prices. Remember, price is a captive symptom of a highly irregular cause that is destined to fail. Count on it.
There has been talk of a $20 handle for crude oil, and it is more than within the realm of probability. If that turns out to develop, that weak rallies to the 50-60 area can be sold.
There is no visible strength in gold, currently. The reaction rally off the October swing low has been very weak, easily holding under the 1,100 level. The fact that price has moved sideways for the past 6 weeks and has not been able to decline to the lower portion of the channel suggests a reaction rally could develop, but it would be normal activity within an established trend to the downside.
While there can be an argument made for some kind of reaction rally to the upside, it is of less important than knowing that gold has not made a showing of a possible bottom, even while it is possible one could be forming. It is not unusual for a bottom to take several weeks, sometimes a month or longer, to confirm itself, so patience is required to let the market do what is will do, regardless of personal sentiment or expectation.
The chart comments contrast strong bullish fundamentals with the more reliable reality of price, price being the final arbiter. One has to understand that the market is fully aware of all bullish supply/demand considerations, yet despite the overwhelmingly bullish read of the fundamental picture, price says otherwise, and ultimately, one can never argue with price.
Simply stated, the down trend has not yet run its course, at least in the paper market, which is what the charts reflect.
Given how trends serve as important information, and one should never position against one, there appears to be little need to be long in the paper market until there is more concrete evidence of a market turn.