Posted on 26 November 2012
Last Friday’s upward surge in gold and silver prices marked a key
technical breakout in the charts and was matched by a fall in the US
dollar. Analyst Clive Maund argues that this may be the start of a move
in gold to $2,700 to $3,500 an ounce as the US dollar finally becomes a
victim of excessive money printing by the Federal Reserve.
This is not a new or original argument but the timing of the market
reversal is very difficult and it is here that the best of the chartists
can be of great help. Markets move in repetitive patterns though this
can also be deceptive and is not a precise science.
The chart below is from CliveMaund.com and we do recommend visiting this website for a full explanation:
However, nothing is for certain in this world. What happens if US stocks take a dive this week? They have become volatile. Up strongly last week, down sharply the week before. Any chartist would also agree that this pattern often portends a sell-off.
If US stocks sell-off then gold and silver could well plunge dramatically too as they did in 2008-9. There is simply a need to sell such liquid assets to pay margin calls in a falling stock market.
That would be a buying opportunity but it would also negate the positive signal given by the price of precious metals at the end of last week.
Source
This is not a new or original argument but the timing of the market
reversal is very difficult and it is here that the best of the chartists
can be of great help. Markets move in repetitive patterns though this
can also be deceptive and is not a precise science.The chart below is from CliveMaund.com and we do recommend visiting this website for a full explanation:
However, nothing is for certain in this world. What happens if US stocks take a dive this week? They have become volatile. Up strongly last week, down sharply the week before. Any chartist would also agree that this pattern often portends a sell-off.
If US stocks sell-off then gold and silver could well plunge dramatically too as they did in 2008-9. There is simply a need to sell such liquid assets to pay margin calls in a falling stock market.
That would be a buying opportunity but it would also negate the positive signal given by the price of precious metals at the end of last week.
Source
