Silver Bottom…Against Gold!

Silver appears to be “carving” out a rounding bottom formation against gold. Note the MACD indicator, which is trending higher.
Gold bullion tends to lead silver at the start of a rally.
China is apparently preparing to substantially increase their use of solar power, and a fair amount of silver is required to do that.  Also, India has enacted a ban on gold bar and coin sales.  Silver could benefit from increased buying there, if the ban isn’t lifted soon.

2013 Silver Maples As Low As $2.29 Over Spot at SDBullion!


Submitted by Morris Hubbartt:

UUP (US Dollar Proxy) Distribution Chart

 

MH1

 

  • When studying charts, I keep a very close eye on volume.  Recently, there was a huge distribution day on this US dollar proxy chart.

Technically, heavy volume is most ominous, when it comes at the end of a rally.

 

  • Interestingly, this volume occurred right before a Fed statement that was very dollar-bearish. The price plunge came because Bernanke promised to continue low interest rate policy.

 

  • That was a rather bizarre and shocking “about-face” change, from his prior statements about tapering QE. The Fed seems to be showing the market that it has little interest in letting the dollar rise very much at all.

 

Gold COT Signals Chart

 

MH2

 

  • This chart roughly demonstrates what commercial traders have done in the gold market, since 2008.  The current price decline has put a fair amount of gold and silver into very strong hands.

 

  • My intermediate term target is $1500.

   

GDX Fuel Cell Volume Chart

 

MH3

 

  • The FCI (my proprietary fuel cell volume indicator) is suggesting that after a slight pause next week, the current gold stock rally should gain momentum.

 

  • Although there have been some rough days since the FCI signal occurred, up volume is dominating the action.

 

GDX Versus Gold Chart Chart

 

MH4

 

  • I am using GLD-NYSE as a proxy for gold on this ratio chart, because volume is superb. An enormous FCI signal occurred on Tuesday.  Investors who see the significance of this event should move some funds immediately, from bullion to gold stocks.
  • This is the heaviest volume signal in the history of this ratio chart.

 

  • The other technical event that is worth noting on the ratio chart is the strong MACD positive divergence.

 

  • Positive technical divergences don’t offer instant gratification, but they give patient investors time to take action. 

 

GDXJ Fuel Cell Volume Chart

 

MH5

  • The fuel cell indicator for junior stocks is not as clear as it is for the intermediate and senior ones. Volume has not surpassed the levels of the April panic.

 

  • That’s not really a concern.  Gold bullion tends to lead silver at the start of a rally.  Likewise, senior gold stocks tend to lead junior stocks in the early stages of a rally, and then the juniors begin outperforming.

 

  •  After a slight pause next week, I’m projecting a rally to the $50 area.

 

Silver Versus Gold Chart

 

MH6

 

  • Against gold, silver appears to be “carving” out a rounding bottom formation.

 

  • Note the MACD indicator, which is trending higher.

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  • China is apparently preparing to substantially increase their use of solar power, and a fair amount of silver is required to do that.  Also, India has enacted a ban on gold bar and coin sales.  Silver could benefit from increased buying there, if the ban isn’t lifted soon.
  • Silver has a cyclical tendency to bottom against gold, about once every 4 weeks.   My recommendation is to buy silver now, and more if it drops next week, to take advantage of the current cycle!

 

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Comments

  1. I suppose you all immediately understood what this silver prices in gold meant? Values around 0.300?
    Some of the TA looks like hopeful guesswork, but this silver:gold thing requires total guesswork on my part.

    • I’m with you there XC – means jack-all to me.
      Based on current prices, I make Gold:Silver at 66.35, and Silver:Gold around 0.0150694444444444, neither of which are even in the same order of magnitude as 0.300.
       
      Maybe the 0.300 figures comes from multiplying pi x current gold price / current silver price / the number of times Jamie Dimon has lied to congress: 3.14159265 x 1,296 / 19.53 / 694 = 0.2999345893813759.
       
      That must be it…

  2. http://www.newsmaxhealth.com/Health-News/gold-weight-dubai-ramadan/2013/07/19/id/516044
    Do Arab Christians get to participate? I guess they would lose weight, as having one’s head chopped off would reduce several kilos from one’s weight.

  3. Seems like a program only fatties can take advantage of. Without severe overweight to begin with, no deal.

  4. gimme some free gold and I’d lose a few lbs.
    How about 1 pound of gold for every 1 pound of fat. 
    I nominate Rosie O’Donnel and Michael Moore as my Dubai doppleganger fatbody  proxies. 
    With that type of coin I’ll hire Gunny Ermey to run their flabby asses off in the desert son. They’ll look like Pyle in Full Metal Jacket.  Hoo boy  what fun!

    • I’ll do you one better! 
      1 Troy Oz. per Pound of Fat! 
      Heck, I’ll even go 1 GRAM/# !!!
      Who is payin’ this out??? lol
      Here’s my body double… (fatboy prepper again!)

  5. not sure why anyone would post the work of Hubbart after being completely wrong for the past two years… Hes a joke at best. 

  6. Mary B
    Wideners just pinged me.   they have primers and bullets

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