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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  • 21 May 2012 1:18 AM | Bill Downey (Administrator)

    Silver Daily Update for May 21 2012

    Trend
    Long term= Up /
    Medium Term= Bearish/ Need a close above 34.50-35.00
    Intermediate Term=Bearish Still below the moving averages
    Short Term= Bullish ---Need to hold 27.20

    Support & Resistance for Monday
    Initial resistance 29.14-29.58– 29.88-30.04 (all prices Spot Forex)
    Initial Support 28.05-28.20 and 2nd tier 27.50-27.70 (all prices Spot Forex)

    RECAP
    Friday saw heavy selling pressure coming into risk assets, specifically equities and oil. However, the real driving force behind the selling pressure is likely the result of several unrelated economic/geopolitical events. Clearly the unemployment report had an impact on price action, but strangely enough it would appear to those more in tune with reality that market participants want lower prices so that the next quantitative easing program can be initiated.  Silver once again bucked the trend and moved higher and above 28.55 and held its long term trend line at the 26.50-27.00 area.

    Current Bullish Features
    Silver price has returned to backwardation but is also tagging along with gold.  If equities can turn up it would add to the short term bullishness for silver.
    Short term cycles point higher into the first week of June.
    A major price hammer reversal on the weekly chart from last week has a high degree potential of a key price low and having it come at a major long term channel gives it a lot more weight.

    The wild card for this week is the liquidity panic.  If there is no major ‘event’ silver is favored higher. If there is an event, and the G8 come in with intervention or announced bailouts or more printing, silver should move higher.
    Watch the stock market, if it reverses higher here (and we did hit important support on the 34 week moving average) then the potential will increase for more upside in silver. The G8 met over the weekend and it will surprise me if we don’t have a big up day in stock markets.

    Silver Short Term – Bullish


    Silver has reversed the short term trend and a short term low looks in place. The 27.50-27.75 seems to offer the best support for Monday.  On the upside, there is minor resistance at 29.02-29.13 but now that 28.50 has been taken out, the next strong resistance is not until 29.40-29.65 and then the 30 dollar level. Odds favor the May low is in place and a bounce into June is underway.  The impulse of the bounce favors it will take another panic in Europe to drop prices.

    Silver hourly price chart with key support area

    Silver Medium Term

    the medium term trend is still bearish as price needs to move above the averages to take out the bearish reading.  However, silver tested a major downtrend line at the 27.03-27,40 area and held on Wednesday.  This trend line bounce is underway as the short term cycles have most likely bottomed.   It’s too early to call “THE” low but this is one of the two buy zones for this year and is labeled so on the chart for those who are accumulating silver. In summary, the trend is still down on the medium term but a short term bounce is underway.

    Silver weekly price chart with long term channel line support and resistance area's


    Monday favors a range of 28 and up to 29.55 if silver catches a bid. It would be nice to get a pullback here for a potential dip buy. Silver might have a bit harder time than gold as its industrial component will need equities to join the bounce. We feel the short term low is in place and the bulls will try and push up to the 29 area as that is their next goal. Trends are still down, but an important low looks to have been placed last week.




     
  • 16 May 2012 1:15 AM | Bill Downey (Administrator)

    The Gold Stocks continue to collapse. 

    Will the FOMC minutes due out tomorrow provide support for this market? 

    it was another day of losses in metals and equities as the Greek government was unable to come to terms and another election will have to take place.  The anti-austerity party is leading the polls and the angst continues to plague the markets.  In France, the newly elected socialist government is causing ripples in the market as well.  The issue of course is that the agreed upon budget cuts of not so long ago are coming apart at the seams as a new government appears just about every month in Europe.  Add to it the slowing global economy and the view continues lower.  The HUI index continues to lead the way down just as in 2008.  It sits at an important trend line. If it slices through it the next stop is 325.

    Hui weekly price chart with long term channel support and resistance

    The price break of the lower green channel line is a serious matter. But it’s what price does after a trend line break that is important.   A re-test of the green channel line could come in play once prices bottom.  For now, the medium term trend remains down.

    16XGLDDLYdmay



    The gold trend remains down and so does GOLD Stocks.

    Silver continues at the bottom of the channel that is now pointing to the 27.03-27.20 area. The trend remains down but a bounce near this area is favored as price is at the lower end of the channel line. A push back up to the upper end of the channel is due to develop. The FED releases the FOMC minutes on Wednesday and that may serve as the capitulation point to this downtrend. We’ve already registered a new low for mid week Wednesday and perhaps a bounce back into the minutes release will develop.  The trend remains down but a bounce can develop at any point here.


    6XSLVWKLYsmay






  • 11 May 2012 11:45 AM | Bill Downey (Administrator)

    Gold

    Intermediate term Chop Channel and short term cycles
    We favored a bounce for Thursday and got it right to the daily resistance listed last night. So for the bottom line on the chop channel has been the low. Today’s consolidation was an inside day on the daily chart. With the cycle window now closed, any new low will favor the downtrend is still in play. A bounce however is certainly within reason at this level but so is the danger in Europe with the debt crisis and the potential for the short term cycle keep prices moving lower.  If we look at the bounces off this lower channel, the 3rd  red cycle from right to left was a SECOND hit of the channel from the prior week. That is the current set up we have. Perhaps we bounce here and then make the low at the next cycle. (see the Pink Area). This is the odds favored scenario at the moment.

    Gold Short Term Cycle Chart

    I’m surprised they didn’t clear the stops below the lower channel but sometimes they choose not to and their other trick is to probe it again and then break it.  In any event, the low on Wednesday has added to the complexity of this cycle turn and its potential.  There’s not much I can do about it, but it now puts a 25% potential that we have made a low. Either way I look at it there is always the danger of another sell off in this environment and that’s what makes it difficult to try a long position because the TREND IS DOWN and as best as we know, so is the short term cycle. Sure it could be a bottom, but what if we called a bottom every time we hit this line?  At best, we can favor a bounce but we question whether it’s the right time to be looking to go long on a short term trade---going into the weekend?  In summary, the trend is still down, but a bounce is favored into Friday and potentially for a few days.  We still think caution is of prime importance here. We are only 24  hours off a 4 month low.  With that said, odds favor A BOUNCE from here into early next week.

    Silver Intermediate Trend
    The unbiased moving average trend is down and price broke down again this week, on Wednesday. We have no choice but to favor lower prices until we see some type of turn. The chart looks like we either bounce here or a plunge a few dollars lower will come into play. The next major support is 26 in SLV or 27 in spot.   If we ever get out of the wedge, a sharp bounce should take place.

    SWING TRADER
    Short term cycles are down and are favored lower into next week but Thursday's usually good for a bounce. We’re at first support for this week but the real stronger support is the  lower white channel at 26 in SLV.  (Spot price is one dollar higher than SLV)

    Silver Price Chart

  • 03 May 2012 12:20 AM | Bill Downey (Administrator)
    The chart below shows the short term cycles we follow. This current cycle is due to end on May 6th (plus or minus 72 hours) and that means that the short term uptrend is favored to end in this time frame and up until this coming Wednesday.  The cycles have about a 75 % accuracy to short term trend changes so they are good for the overall short term trend direction.

    The Short term cycle has been in play since two Monday’s ago when we made a low at 1623. After the Wednesday drop, price has overall been weak during this uptrend cycle.
    The bad news is that the next short term cycle due date is May 6th (plus or minus 72 hours) and that means that the window for a short term trend change back down will open on Thursday, of this week and last until Wednesday of the coming week.

    GOld Daily price chart with short term cycle turns


    Medium Term – (BEARISH/) (Moving Averages 32.30-33.80)
    the medium term trend is still bearish as price needs to move above the averages to take out the bearish reading on trend. It’s best to remain concerned here about silver prices.  The drop has been almost methodical just a grind each week a bit lower.  Price is in the middle of the channel and as long as the trend is down its best to continue favoring lower prices. Medium term support is the 27.50 area. Odds continue to favor the downside has control on the medium term.

    Silver weekly Price Chart with Support and resistance channel lines



    US Stocks
    Intermediate trend – S&P500 using ETF (SPY)
    TREND–Neutral at 139.82 on 4/30.
    Moving average trend (138.41 – 138.50)

    The Unbiased moving average trend is neutral. A move back out of the wedge and close below the moving averages would initiate another bear reading.  Our own opine is this market should remain under pressure for a bit longer, but it is an election year. If we close below the moving averages we’ll flip back to bearish. We still think it takes a close above the upper trend line to eliminate short term downside pressure. Price is hanging right on the lower trend line as the economic reports had stocks down 100 points but somehow managed to recoup almost all of it.

    3SPY4Hdmay

    S&P500 Index Price chart using ETF (SPY) with channel lines and moving average trends

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  • 30 Apr 2012 11:50 AM | Bill Downey (Administrator)

    There is a big battle going on for control of the gold market on the short term.  On the chart below,  look at all the spikes down in price as the shorts try to break the market and the 1640 closing price basis.  But look at the reversals back up on each spike as the LONGS in the market respond and BUY the sell off. 

    Monday mornings spike on the chart is now the 5th attempt to bring the market down. So far the longs have responded again at the 1640 area. We have a downtrend RED line and an UPTREND Yellow line that has formed a wedge. But which way do we go from here?  Which ever way gold breaks out should provide the trend for the remainder of the week. If the short term trend has turned up, gold has no business being below 1633. What we want to see is price close above the red downtrend line. That will add additional upside potential to retest the April 13th high at 1681. 

    GOLDTICK30APR

    Gold tick chart with support and resistance lines

    Gold Cycles

    The short term gold cycles were due to bottom April 20th (plus or minus 72 hours) and so far the low of 1623 was within the short term window and so far that area has provided the low and a bounce is now underway.  It takes a close above that upper blue dotted downtrend line for the rally to continue.  Watch the 1666-1672 area as resistance. If we get above that, gold has a chance at challenging the April 13th high and potentially the 1705-1712 area.  BUT THAT UPPER DOTTED DOWNTREND LINE IS A KEY PRICE point that we need to get above on a closing basis.

    28GOLCYCwa1




    SILVER

    Silver is trying to forge support just above the 30 dollar area. The Wednesday drop below 30.50 and touch of 29.90 ignited some short term buying and price has moved back above the 30.50 area.  Any close now below the 29.90 area and last Wednesday's low would be a bearish development. On the upside, a close now above 31.70 would suggest a test of 32.50 - 33.50. 

    Technical indicators have us where we could start a rebound as well. In summary, the trends are all down in silver with the exception of the long term. On a shorter term basis, silver is trying to make a low and rally to go test support. Any close below the Wednesday low would favor lower. Any close above 31.70 should spur a test of the 32.50-33.50 area. 


    30SILVERDAILYdfba

    Silver daily price chart with Technicals














  • 19 Apr 2012 10:25 PM | Bill Downey (Administrator)

    Gold Short-Term
    Gold traded below 1640 again on Thursday, getting as low as 1631.12 on FOREX SPOT, and about 75 cents lower than last week’s low.  The one big move of the day came after that low was achieved as a 20 dollar rally ensued from there over the course of an hour and a half into the key 10AM Comex New York time frame. From there price retraced almost the entire move back into the close.

    Markets continue to act totally erratic and not able to hold any trend whatsoever as the Thursday rally was just about totally erased once again. The chart below shows the action since the 1681 high as it continues in a choppy and overlapping condition with swift rallies only to sell off once the short term traders get on. This is exactly what happened again on Thursday.

    We’ve remained patient all week looking for some type of bottoming action. Tuesday looked like it had the makings as does today’s action at the lows. A short term decision point is arriving and while cycles are due to turn this week,  the choppy action leaves us no choice to remain patient. THE UPTREND line from the 1612 low points to the 1635 area as a key support point as we move to Friday.  If we break the Thursday lows and the channel lines, it will activate the lower channel line in the 1620 area.

    Gold Price Tick Chart

    The one thing we’ve brought up over the past month as the one concern we’ve had is the Gold Stocks and their performance.  The chart of the gold stocks below show price breaking below the long term moving averages. That is a very disconcerting technical breakdown. If we look at the chart it has only happened once---during the crash of 2008 at a time of the last liquidity crisis. While the blue 34 month is well above RED 13 it nevertheless has put the long term out of bull mode and in neutral. Odds favor a test of the trend lines below price will take place in the 325 or 400 area, depending on which channel line will provide support. With gold’s 34 week moving average near turning its MEDIUM TERM trend from Neutral to Bearish, it sends a warning out to us that the liquidity crisis in Europe remains in trouble and that means that Gold and Gold stocks will remain under pressure as long as there is a hint of a default in the system. This chart makes us leery about the upside potential in gold and silver.  We're still bullish, but this chart is a concern.

    HUI Gold Stock Index Monthly Price Chart with long term averages and channels


    The weekly chart shows why the upside area is being resisted---the weekly moving averages are just above. While silver is holding up well so far this week, we should keep in mind that the medium term is bearish and silver needs to hold the 31 area. Should silver break from here, it probably wouldn’t be pretty again.  We are approaching the one year anniversary of the Silver crash of 2011 as we are just a few weeks away. As we can see price is bunched up into a wedge once again and the range keeps getting tighter and tighter. Thus it’s best to remain concerned here about silver prices.  Price needs to get out of this wedge and in a hurry. As far as the medium term goes---the fact that we’re not seeing the April seasonal is getting to be a concern.  We’re hoping that the short term cycles due this week will give us a bottom and further price appreciation.

    Silver Weekly Price Chart

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  • 17 Apr 2012 12:46 AM | Bill Downey (Administrator)

    In our last update on the DAILY PAGE  we discussed that the one thing we did not like was the choppy price pattern that gold has exhibited since the lows at 1600. Of course, gold reversed lower just a few hours after that update at the 1681 area in what is now a SECOND rejection of such an important price point. We also emphasized how there has been relentless selling at the bid price in gold on the FOREX over the past two weeks. That has slowed a bit but the selling is still greater on the bid then the asking price. And that is what OBV (On balance volume measures). Whenever trades happen on the ASK price, it’s a bullish factor.  And when transactions take place on the bid side, it has a bearish tilt. By adding the trades on both bid and ask, and subtracting the higher number from the lower, we get which side of the market (bid or ask) is getting more action and can provide subtle clues as to direction of the trend.

    This TICK chart of gold shows how gold has to recapture and be above this downtrend line as a minimum to establish any upside potential. Thus we can say over the next trade day that we need to maintain above the 1645-1650 area---again as a minimum.  And we can also see how important it is to get back above 1665 and then into one of those blue channel lines.

    Thus if we begin to trade below 1645 again it will quickly tilt the odds in favor of the bears. Should we break 1641 on Tuesday, it would open up and activate a potential price move lower towards the 1600-1625 area.


    Gold Price Chart USING TICKS with trend lines of support and resistance

    Intermediate Trend
    Moving Average Trend – Was Bearish at 164.53 since 3/28/12 – Now Neutral at 162.39 on 4/12/12
    Moving averages currently at (160.99-161.05)
    Trend

    the unbiased moving average trend moved out of bearish mode and is now NEUTRAL as the moving averages are just 6 cents apart and the price close at 169.85 has all three at the same spot.  It is this potential that still allows for price to move higher here into the end of the week, but also to breakdown.  The overall trend is down and still within the channel.  With price and the moving averages all bunched up, the next move should begin during Tuesday.  Even with this sell off since last Thursday, this is the closest the intermediate term has been to bullish since the Feb 29th 100 dollar sell off in gold.
    Swing Traders
    Things can go in either direction here.  I was stopped out of my long gold on Monday and I’m personally on the sidelines again in short term trades of Gold.  If you’ve been building a position, be careful here.  With the short term cycles still open to either direction it makes for a difficult call. However, whichever we go should favor an opposite direction once the next cycle begins (April 20th plus or minus 72 hours).  When we look at the last two weeks of action it is sideways and that is why a low or a high can’t be ruled out. If we do get a high at week’s end and the cycles turn, it would forecast another two weeks lower. This is not what the odds favor as a seasonal move---and usually a strong one develops in April. With mid month being here, the odds favor a price low this week and a rally to end the month.  Whether the gold market is going to move in the odds favored direction is more questionable than usual---as it has been pretty much not followed the odds over the last two weeks.


    Gold using ETF (GLD) Price Chart with moving averages and support and resistance lines












    6GOLDTICKda

  • 12 Apr 2012 5:03 PM | Bill Downey (Administrator)
    The gold and silver markets rallied on Thursday and have moved above some key price points on the charts.  The gold chart below shows the price movement on Thursday.  Price had coiled into a wedge where the downtrend and uptrend line meet up on the short term charts.  Today's break above this downtrend line opens up the potential for gold to rally towards the 20th of the month where the next set of short term cycles will be due.  Seasonal trends favor higher into April. 

    There should be strong support now at the 1655-1660 area in Gold.  There is one more price point to hurdle and that is the Highs at 1681-1688.  A close above that area on a Friday basis would favor higher prices into next week. 

    Gold Price Chart with Channel lines of support and resistance

    The biggest news of the day was the HUI Gold Stocks rally back into the range of the long term moving averages.  The key for the HUI is whether price can close back above the long term moving averages and the 500 area.


    HUI Weekly Price Chart with Long Term Support and resistance Lines

    The seasonal aspects usually favor higher prices in April and the Thursday rally in the metals puts price back in a position to move higher into the Mid-May time frame.

    The chart below shows the average price pattern for April during the bull market years 2001-2011.  A weekly close above 1681 in spot gold would favor higher prices.

    Gold Seasonal price trends for April







  • 11 Apr 2012 11:36 PM | Bill Downey (Administrator)

    GOLD
    Intermediate Trend
    Moving Average Trend – Bearish
    at 164.53 since 3/28/12 --  On the edge of Neutral
    RESISTANCE (160.94-161.27)

    Trend
    The unbiased moving average trend is down but price has got to get above the moving averages to neutralize the downtrend above 162 on a closing basis to neutralize the downtrend. We held MAJOR SUPPORT AREA at 155-157 and price is attempting to move out of the DOWNSIDE WEDGE. Two daily closes above the wedge pattern will favor higher prices on the short term.  We suspect that a MOVE out of the wedge could be accompanied by a STRONG UP Day.

    Price is only 25 cents from Neutral so any move up tomorrow can take the trend out of bearish mode.

    Swing Traders
    the trend is very close to going neutral.  If price begins to move above the wedge a strong daily move would be favored (especially if we move above 1675-1681 in spot gold). Two daily closes above the wedge would favor the intermediate term trend will be in play.

    Gold using ETF GLD Moving Average Trend


    SILVER

    Silver and the 31.46 AREA
    One of the reason’s we’ve been keyed into the Silver 31.46 area is that it’s a very important Fibonacci price level.  A close below 31.09 – the March low would suggest that silver prices are not done going down.

    This is a very important price point for silver to remain above on a weekly basis and to some extent a daily basis. For now it’s the most important price area to watch this week once again. Nimble traders can try to LONG 31.46 – 31.50 with stops just below it.  If this area gives way, the potential for silver to move lower will significantly increase.

    Silver Tick Chart

  • 10 Apr 2012 1:10 PM | Bill Downey (Administrator)

    SILVER
    Medium Term – (BEARISH/) (Moving Averages 33.60-34.41)
    The medium term 34 week moving average range is 33.60-34.41---and any weekly close above the averages would return the medium term ‘trend’ rating from down, to neutral. A monthly close above 35.83 would open up the potential for silver prices and would suggest the medium term correction is completed.  Until then the trend remains down on the medium term.

    Silver Weekly Price Chart

     

    GOLD
    Medium Term Trend (1682-1707) Neutral to lower---but at key support.
    The price low at the GREEN CHANNEL line is a key area and price is at one of the two price points where a YEARLY low should take place. Unfortunately the 2nd price level is the 1300-1400 area. Nevertheless, if you’re looking to buy physical or add to medium to long term positions, this is one area where you add a bit.  APRIL AND JULY are key times when you should be buying gold and silver.  November and February is a great time to be selling some.  That’s the best yearly plan to go with. 


    Gold Weekly Price Chart

    In summary, the DOTTED TREND LINE and the LOWER GREEN is a major point to watch. April is well known to establishing price lows so we’re on the lookout.  This week will be important. It looks like price is trying to establish a bounce.


Technical Analysis :: Gold & Silver

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