by Bill Downey     Price Analysis of Gold and Silver
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Technical Analysis Trading Gold, Trading Silver/ analysis By Bill Downey providing key turning points & charts for investors and speculators in Precious Metals Trading, and Precious Metals Markets

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Bill Downey, of Gold Trends.net, LLC, is an Independent Investment Analyst with over twenty years of study. YOU SHOULD NOT TAKE ANY MATERIAL posted on this WEBSITE AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED. Do your own due diligence. No one knows tomorrow's price or circumstance. The author intends to portray his thoughts and ideas on the subject which may s be used as a tool for the reader. GoldTrends does not accept responsibility for being incorrect in its speculations on market trend or key turning points that it may discuss since they are at best a calculated analysis based on historical price observations.

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Deflation, the velocity of Money, and Golds 1st price resistance on the short term

07 Apr 2015 12:34 PM | Bill Downey (Administrator)

The Swiss Central Bank lost 50 billion Swiss francs on the Euro Peg.

The IMF has now recommended that Switzerland should DEVALUE the franc by increasing its money supply.

Deflation is still unfolding because people lack confidence in the future. As long as they remain uncertain about the future, they will continue to hoard their cash and that causes the velocity of money to decline further fueling the DEFLATION.   The chart below is one I worked on in June of 2013.   Nothing has changed as we are heading for a major liquidity crisis/debt default.  Gold will return to the forefront when people begin to spend again or when they decide to EXCHANGE their collapsing currencies.  

Velocity of Money Chart


There is also a referendum that will come up with the idea that all credit decisions should be handed to the central bank now in Switzerland. If these people could not manage a peg, can you imagine what will happen to the entire credit markets?

The IMF sees the problem with the capital flows still moving from the Euro into the dollar and franc while Euro based assets shift within Europe to Germany.

The strong franc will no doubt cause the Swiss economy to turn negative as well as the rest of the world turns down even harder.

It is not Doom & Gloom to pay attention and understand how things work.

You will not be able to warn someone who does not want to listen until they see it for themselves. In Europe, they see it and live it everywhere. In the States – we are not there yet. Guess what! That is also why gold is not yet ready to rally yet. This is not about what you “feel” or see yet, this is about what the MAJORITY sees and feels.

Gold Chart
Gold has reached 1st target resistance on a weekly basis again. This is the 4th test of 1222-1225 since the week of February 16th. Odds are high that gold will not hold another test of 1222-1225 and if tested, a breakout towards 1245-1272 can come in play. So far Tuesday is range bounce (as forecasted on last nights website). Support is 1205-1209 for the remainder of the day. The 1198 area is also support. Resistance is the 1215-1220 area.

ANY CLOSE ABOVE 1228 favors higher towards 1245-1272. If gold supports 1205-1207 the potential to retest the highs will remain. On the downside, support is 1195-1205. A close below 1195 favors lower towards 1172-1180.

Gold price chart since the 2015 high


Gold Cycles

The Medium term Cycle turn (green) suggests a low is made and higher prices are favored but the short term cycle is the big question.

Did we make a blue cycle low on Thursday/Friday morning (when the cycle window opened) or did we just make the blue cycle high today (when the cycle window closed)? And that really is the dilemma we face with short term cycle direction. Last months red cycle turn allowed us to pull a good trade in gold and silver on the signals page. On this month’s turn, we have the opposite.

We have a situation where gold can go either way because the chart can interpret a blue cycle low (April 1st) or a Blue cycle high (April 6th). The only way we are going to get odds is when gold gets above 1229 and closes above that level also. That can lead to the 1245-1272 area as a 1st target on a cycle push higher.

But until we get above 1229 then the potential that we just made a blue cycle high and another test of yearly support can’t be ruled out. The best strategy then is to favor higher if gold gets above the dual black channel resistance line and re-enters into the UPTRENDING CHANNEL (with the fatter black dotted lines). That will favor higher into April 18th (plus or minus 72 hours). If we don’t exceed resistance and pullback to the 1160-1180 area and hold into the 18th of the month, then odds will favor another push higher will begin then. In summary, A PUSH ABOVE 1229 GIVES THE BULLS THE ADVANTAGE. Gold has held 4 tests of resistance. ODDS ARE HIGH resistance won’t hold 5 times. The cycle window closes after the Tuesday close and the next short term cycle will be in play into the 18th.

Gold Cycle



Silver

The silver weekly price targets/resistance of 1725-1750 has been hit for the 2nd week in a row. The 1635-1650 area is support and then the 1599-1609 area for this week. Any close above 1752 favor’s higher into next week. Any close below 1635 will favor lower.

Silver price chart




Technical Analysis :: Gold & Silver

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