Gold and Silver Update – 29 Apr

OK, I know I know, I am supposed to be fishing! I am but I had to return to civilization to pick up the spousal unit at the Sky Harbor in PHX. I will be back at the lake tomorrow. So I thought I might as well post a couple charts.

Gold is taking front and center as silver succumbs to the Wicked Witch and her desperate efforts. Silver will be back in the limelight in short order. But, gold is really impressing people with its controlled grind higher. So far minimal effort has been expended to break 1500 and the market clearly has 1600 in sight. Even numbers attract both on approach and when leaving them higher.

The gold continuous contract closed at 1561 and is currently trading at 1565 on the Globex. Resistance is at the high of about 1570. Support is the previous swing high around 1520. further support is just below there at the previous swing low and the 18 day moving average near 14.93. Price has popped outside of the Bollinger band and has also breached the trend channel that is well defined. RSI is getting extended to the over-bought side with a reading of 84. Stochastic is embedded. A likely future would be for a slight retrace or sideways action early next week, allowing price to re-enter the Bollinger band and provide some relief for the high RSI. As long as stochastic stays above 80 and embedded, pullbacks are buying opportunities within a strengthening market.

I think this market wants 1600 in a bad way. I also believe the dollar chart will tell us what will happen there, either an acceleration through and up to 1650 or a big round number consolidation while the dollar recovers from over-sold status. I will assess my gold position there and decide whether a strategic liquidation to cash is in the cards to generate a future leveraged trade.

The Elder Impulse chart is painting a green bar and indicates strengthening momentum, a signal for long trades.

Silver took a small hit today and speaks to the games being played on the Comex. It is very rare to see gold up big and silver down. Dirty tricks, games, and criminal behavior on the Crimex. Blythe successfully painted a “double top” on the chart with supporting divergence to support the thesis. Resistance was 49.75 and set the first top. Yesterday that level was approached before settling lower on the close. Today the market closed lower and painted top number two. RSI was significantly lower on top #2, along with lower stochastic and MACD histogram. This is typical for a double top reversal and would suggest a target lower equal to the height of the pattern, roughly $5. Therefore, Blythe wants you to believe that silver has topped and wants to see the mid 44s, or roughly where the last swing low sits. This just happens to be where support lies, how convenient. I am a buyer just above there, perhaps 44.63. I kind of doubt buyers will allow the price to get that low, but we’ll see.

The Elder Impulse chart painted a blue bar and signals exit from long trades. This shouldn’t be a surprise considering how desperate the paper hangers are to get out of this month alive. Beware, blue bars don’t last very long on this chart. they have a tendency to take on a green hue after a day or two. The pink line is the 13 day exponential average and is part of the Elder system used to generate signals. Along with the MACD histogram, it gives an idea as to momentum within the market. Both sloping up gives a green bar, both down a red bar, and a split with one going up and the other down renders a blue bar. Notice that price has been supported by the 13 day EMA and hasn’t touched in a month and a half, and only once in 3 months. It is currently at 45.06 and climbing. If the pattern continues, I expect price to converge on a pullback around 46. This would be another interesting place to put in a buy with a stop somewhere near my entry of 44.63 discussed above.

Good luck to all next week, I am heading back to the lake!

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