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Special Report: A Longer-Term Technical Perspective on Gold, Silver

By Jim Wyckoffof Kitco News
Thursday March 14, 2013 10:40 AM

(Kitco News) - No matter what your trading timeframe-be it a short-term intra-day trader, a position trader or a longer-term trader/investor-looking at the longer-term monthly charts for the markets you are trading is beneficial. History shows that trending markets see prices tend to gravitate toward historical highs or lows on the monthly charts, once those price trends become stronger. In other words, the historical highs and lows you see on the monthly charts are important longer-term technical support and resistance levels that can either halt existing price trends, or if penetrated can accelerate existing price trends.

See on the monthly continuation chart for nearby Comex gold futures that the past few months have tested the mettle of the gold market bulls (pun intended). Prices have lost value and have negated one uptrend line on the monthly chart. There is no doubt the shorter-term gold traders have been beaten up in recent weeks. However, the longer-term technical posture for gold, as depicted by the monthly chart, shows a longer-term price uptrend remains in place from the 2001 low of $255 an ounce. It will take a move below major psychological support at $1,500.00 an ounce to negate the longer-term price uptrend which would then also take the gold market out of a longer-term bullish technical posture. Indeed, the $1,500.00 price level is the critical "line in the sand" for the gold market bulls.

Meantime, the monthly continuation chart for nearby Comex silver futures shows that a longer-term uptrend line remains in place, but just barely. See that price action recently is challenging trend-line support and has even dipped slightly below it. Serious longer-term chart damage would be inflicted in the Comex silver futures market if prices drop below major chart support at the $26.00 level.

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By Jim Wyckoff, contributing to Kitco News; jwyckoff@kitco.com

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 precious metal products, 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.

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