Silver: The Best Is Yet To Come
Tuesday March 22, 2016 15:59
- America was built by “citizen champions”. Should the current gold price action be described in a similar way, as a “rally of champions”? I think so.
- Technically, gold is arguably overbought. It may be due for a correction according to cycle analysis, and yet the world’s mightiest metal just keeps moving relentlessly higher.
- Please click here now. That’s a snapshot of the SPDR fund tonnage. Solid buying has boosted the holdings to more than 820 tons.
- Also, a potential “rally accelerant” has suddenly manifested itself, in the form of an end to the Indian jeweller strike. Please click here now. Double-click to enlarge this key four hour bars gold chart.
- It could be persuasively argued that gold has essentially traded sideways because of the strike.
- Now that the strike is over, demand appears to be rising in the world’s most important gold market, and gold is rising up nicely, from a small inverse head and shoulders bottom pattern.
- My $1320 area target remains within reach on this rally. In the big picture, I think that as bullish as Janet Yelllen’s first rate hike was for gold, her next one could turn the gold price rally into a serious “barnburner”!
- Please click here now. Double-click to enlarge. This eight hour bars chart of the dollar versus the yen has ominous implications for the dollar.
- A bear flag is in play. In the big picture, it’s almost impossible for gold to experience a major setback, when the dollar is tumbling against the yen. Please click here now. Double-click to enlarge. That’s a longer term chart of the dollar versus the yen, using daily bars.
- An enormous top pattern is now in play, and dollar rallies are quite frankly best described as “pathetic”.
- A breakdown from the current 111 – 115 range could unleash a new wave of dollar selling, yen buying, and gold/silver buying. That could easily push gold towards my $1320 target, and leave the dollar wallowing in the 105 -107 zone on the dollar-yen chart.
- If a much bigger leg of the gold price lies ahead, silver will begin to dramatically outperform gold. Is there any evidence that such an event is on the horizon? Yes, there is!
- Please click here now. Double-click to enlarge. That’s a daily bars chart for silver, and to say it looks inviting is arguably the understatement of the year.
- There’s a beautiful inverse head and shoulders bottom pattern in play, with a technical target of $17.50 - $18.
- Silver price enthusiasts should note that India is a massive silver buyer, so the end of the jeweller strike there could have an enormous impact on silver demand.
- Silver is not just the poor man’s gold. In my professional opinion, it’s the world’s second mightiest asset, and it should be part of all investment portfolios.
- If an investor owns no silver at all, they can pay any price for a small amount of it. After that, they can use my unique “pyramid generator” for systematic capital allocation.
- For another view of the silver price action, please click here now. Double-click to enlarge. This weekly bars silver chart is extremely interesting. Here’s why:
- There’s a major trend line breakout in play, and the inverse H&S bottom pattern on the daily chart appears to be acting as a kind of “Launchpad” for the weekly chart breakout.
- Note the beautiful position of both the RSI indicator at the top of the chart, and the 14,3,3 Stochastics series at the bottom of the chart.
- Major breakouts tend to have this kind of “textbook” technical set-up, with RSI on the weekly chart well below the overbought zone, and the Stochastics oscillator staging a “flatline” event in an overbought condition. Once the $18 target has been acquired, I think silver will pause, and then move towards $25.
- Silver price fans should also look at the SIL-NYSE silver stocks ETF, which is poised to lead bullion to more upside gains.
- Please click here now. Double-click to enlarge. GDX continues to make superb upside progress towards my $23 target, on this weekly bars chart. Investors who may have become demoralized and sold their gold stocks at losses should not wait for any type of correction to get back into this powerful market. Here’s why:
- Rather than selling off from the $23 area, GDX could instead form a high right shoulder, far above the $23 area. This is exactly what the silver bullion chart action is implying is going to happen! It’s clearly a glorious time for the Western gold community, and I’m becoming quite convinced that’s it’s about to become… even more glorious!
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.