Silver & Gold

The corollary of our recent assertions that the U.S. Dollar is due to rally is of course that silver and gold will drop.

We observe the relevant charts and discover patterns which suggest a U.S. Dollar uptrend is indeed forthcoming.


Silver 5-year :



We find silver approaching an area of resistance, as marked by the horizontal red line. We note that it is in a "bearish rising wedge" which peaks in that same resistance area mentioned. The technical implications are very bearish should it break below the lowest ascending green line shown.

We also a see in silver a bearish non-confirmation of gold's breakout to new highs.




Gold 5-year :



On the gold chart we see gold now apparently comfortably above the technical and psychological $1000 resistance level marked in red, however it too is in a rising bearish wedge with channel resistance overhead as marked by the green lines which suggest a peak for this move no higher than circa $1250.

That level is the same high implied by the "reverse head & shoulders" pattern found in the gold chart from early 2008 until it broke & held abvove $1000 recently.




UUP, PowerShares DB US Dollar Bullish Fund, 3-year :




DRR, Market Vectors Double Short Euro ETN 2-year :



Both charts above show "descending bullish wedge" patterns and a current price at long-term support levels as marked by the horizontal green lines.

The speculative trades implied by these charts are obvious, and we'll keep a close watch on these trends for a potential entry.

Note that a major reversal in the U.S. Dollar would almost certainly correspond with a major reversal in global stock markets.



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This blog is merely a diary of some of our thoughts and trades and is in no way whatsoever to be considered investment advice of any kind. Always without fail consult a competent, experienced, and honest broker or investment advisor before making any investment or speculative decisions.

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