Wednesday 3 October 2012

A narrow trading range for Gold and Silver

The precious metals have now been stuck for around three weeks. If this is just a sideways consolidation, then we should soon see much higher prices in late October and into the post US election period. If however we are simply not able to break any higher, then likely downside is a significant 7-10% or so.


GLD, daily



SLV, daily


Summary

Gold and Silver are trading very similar in style, Gold still seems to be stronger, and that's largely due to it being seen as a safe haven against the depreciating currencies.

From a MACD cycle perspective, we're very low on the cycle, and there is great potential a multi-week move higher - although the weekly cycle would argue against this, whilst the monthly cycle would support it.

With QE3 announced, there is still a feeling of 'ohh, is that it?', especially for the metals and Oil - which is starting to break lower.

What is clear, prices are going to break significantly..and soon. We sure won't be staying in this tight a trading range for much longer. The direction in which we break will probably hold for some weeks, perhaps all the way in early 2013.