Gold Silver Worlds: In this article, contributor Peter De Graaf shows in five charts the long and short term corrections of the gold and silver price. Precious metals remain within their rising trendline, despite the negative sentiment among investors and trader. Moreover, the seriousness of the debt situation and the impact on the dollar “paper currency” is shown in four charts. The debt ceiling in the US being pushed upward for the 79th time since 1960. Right after the last raise in 2011, the price of gold rose +17% between August 1st ($1620), and August 22nd ($1898) – that was +17% in just three weeks! A similar reaction by gold at this time could result in price rising quickly from $1281 to $1498.
Gold Price Corrections
The current correction in gold started in August 2011 and has now gone on for 112 weeks – (it most likely bottomed on June 28th). This has been the longest correction since the current bull market started in 2002.
- The correction of 2006 lasted 71 weeks before a new high was reached. There followed then a 50% price rise, (+85% from bottom to the next top).
- The correction of 2008 took 77 weeks before a new high was reached. The gold price then advanced by 80%, (+325% from bottom to next top).
The expectation is for gold to advance by more than 50% as in 2006-2008, and more than 80% as in 2008-2011 during this next ‘leg up’, because of the depth of the current pullback. Because of blatant manipulation of the gold price by large traders dumping oversized lumps of futures contracts during hours when trading is usually sparse; the price of gold is starting this next rally below its normal starting point. This is likely to cause the price to act in slingshot fashion, and may very well surprise a lot of people.
Here is the gold chart that records the beginning of the current bull market, along with three upside breakouts and the expectation for the next breakout, marked by arrows. (Charts courtesy www.stockcharts.com unless indicated).
The RSI (at top of chart) is ready to rise, the CCI (at upper bottom) is rising from oversold conditions, and the A/C line at the lower bottom is still in uptrend after merely leveling out.
This chart courtesy Incrementum.li shows us that the current correction in the gold price is not unusual, if we accept the principle that the higher the price, the larger the pullback.
Featured is the daily gold chart. Price is carving out a rising channel that is anchored by two upside reversals (June 28th and Oct 15th).(...)Click here to continue reading the original ETFDailyNews.com article: 5 Important Charts For Gold and Silver InvestorsYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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