Submitted by Morris Hubbartt:

The pullback in silver this week brought the important RSI indicator back down to the key 30 area.  Silver is one of my favorite long term growth investments.
On the long term silver chart, RSI for silver has declined to 30 area, seven times.  Six big rallies have occurred after each of those events.  Will this time be “lucky number 7”?  I think so, and my target for this rally is $44.

Submitted by Morris Hubbartt:

Once the neckline on the dollar index chart breaks, a target of 73 will be activated, and gold should begin to rally aggressively.
The general attitude from Wall Street about the gold bull market is disbelief and denial. From the standpoint of contrary opinion,
this viewpoint is bullish for the precious metals.

The longer gold takes to break out of the current “power house” consolidation, the more explosive the move is likely to be.    
I believe that gold and silver are on the cusp of entering a “new price era”.

Submitted by Morris Hubbartt:

The dollar’s failure is probably being masked by a gold market that feels a bit like it is “under attack”. The line in the sand that I have set for the dollar is 80.50It has closed under that key price numerous times, which indicates technical deterioration.
This “Cork In The Sea” weekly chart highlights a massive symmetrical triangle formation, with a horrific final price objective of about 50 for the USDX.   Where would gold trade if the dollar were to suffer such a catastrophic decline?  I believe it would trade above $4000 an ounce.

Submitted by Morris Hubbartt:

Many market pundits seem to have forgotten how strongly QE can affect the price of gold. This gold chart highlights those effects, with a broad green “chart brush”.   Note the thick green bars.  They highlight the gold price action during QE1 & QE2.  I believe QE3 (and possibly QE4) will produce very similar results.  When the Fed purchases bonds in the open market with printed money, gold tends to rally for a significant period of time.
Quantitative easing is positive for gold, and the effects on silver are even more powerful.  This chart highlights the enormous gains that silver achieved during both QE1 and QE2.   My focus is physical silver, because of concerns about the banking system and growing volatility.
My short term target is $44, which should be acquired at about the time that gold reaches $1850.  To put that in perspective, I expect silver to gain about 29%, while gold gains 7%.  That’s an outperformance ratio of about 4 to 1!

Submitted by Morris Hubbartt:

My technical analysis indicates that a major long term bottom is in place, across the entire precious metals sector.  The intermediate term gold target is $2015, but gold could move even higher before correcting significantly.   When daily CCI spikes lower, as it did recently, followed by RSI touching the 30 level, a trending move higher is very likely.    The short term target is $1850, and it could be acquired quickly.

Fundamental and technical analysis suggests higher gold stock prices are coming. What is most compelling about gold stocks is the undervaluation of the sector against gold itself.   GDX is currently as cheap as it was during the meltdown of 2008.   There is a substantial head & shoulders pattern in play now.   I am projecting that gold stocks will rise to about .44 on this ratio chart, which is almost a 50% gain from the current price.

By Morris Hubbartt:

The US dollar counter-trend move to the upside is probably nearing the end of the road. Firm resistance resides at the 81.25 area, and all of the indicators point to lower prices.   Once the countertrend move higher is complete, the large head and shoulders top pattern should take center stage. A decline below 80.50 could trigger a mini-crash.

We may be entering the eye of the debt storm, so I prefer to buy physical metal, and hold it for long term.   The immediate silver target is $35.44, and once that is acquired I am projecting that a stronger move will carry this mighty metal to the $44 area!

By Morris Hubbartt

Silver is an ideal metal to accumulate on price weakness.  The market is currently oversold.  Please note how perfectly the price has pulled back to the green downtrend line, after staging a magnificent breakout!  Silver’s RSI and CCI indicators are currently flashing strong buy signals.  I expect the $44 price target will be acquired by January, 2013.  The “silver plane” appears to be cleared for take-off. 
Are you are on board?

By Morris Hubbartt

The market that will be most damaged by QE bond purchases is the US dollar. The destructive action of quantitative easing is somewhat hidden, because other central banks are also damaging their own currencies.  Technically, the US dollar is somewhat overbought, and the counter-trend rally is failing. The key number is 80.50 and an additional monthly close below that key level sets the stage for a substantial downside move.

Right now, the normally-volatile silver mining stocks are the star of the precious metals show.  The incredible resiliency of silver stocks during this correction, implies that they could run like the wind once the bull trend resumes.   A move higher in silver stocks also sets up the underlying metal, for a solid move to the upside.  Please note the position of the MACD indicator, as well as the very bullish volume pattern.  Silver stocks, and silver, may be about to soar!

Submitted by Morris Hubbartt:

For several weeks, my US dollar analysis has been focused on daily charts. The dollar’s current counter-trend move has not taken the price above 80.50. I think the rally is ending here, and a new decline is about to begin.   My focus today is on the larger picture portrayed on the weekly chart.  Here, 80.50 is also a key level.
Since 2005, the dollar has meandered aimlessly between about 70-90, creating the appearance of a cork lost at sea.   Now, a substantial breakdown seems to be occurring.  Oscillators are continuing to “head south”, intensifying the long-term downtrend in the world’s reserve currency.   

In particular, please note the action of MACD, which is producing a fresh sell signal.  Each high point attained by MACD is lower than the previous one.   The chart is covered with technical non-confirmations, suggesting the dollar may be ready to tumble. 

 

On October 16th, the dollar’s short term bounce probably ended. A bear flag has become the right shoulder of a significant h&s top pattern. A new and sizable bearish move would be confirmed if the neckline breaks. The mathematical target of the h&s top pattern is about 73. The inner Fibonacci arc, and resistance near 80.50, is probably limiting the upside of the dollar’s rally attempts. A decline below the neckline area at 78.50 could start a very powerful rally in both gold and silver.

A “cup and handle” pattern on the gold chart appears to be almost completed.  The handle is forming nicely, and volume is bullish.  The price target is about $2000, which is similar to the $2015 target projected by other technical data.

The gold chart indicates that the gold price has quite a ways to go the upside, before the next serious correction occurs.  The RSI indicator has not reached the red danger zone that I’ve highlighted.  Strong bullish moves often occur right before the price goes into that overbought area, above 70.
QE1 & QE2 had a profound effect on the price of gold. During the euro crisis, QE2 may have stopped the dollar from rallying significantly.
The current round of QE has just started, so this rally in gold may be equated to the age of a newborn baby. Over the next 12 months, I expect QE3 to increase the size and velocity of the US dollar “snowball”, and create the strongest leg of the gold bull market.   My intermediate trend targets are $1850 & $2015.
From $2015, I expect a more significant price retracement, and then a move up to my primary trend targets, which are $2300 and $2850Gold should reach all these prices, within twelve months.