Gold closed lower right at support of 1532. Additional chart support exists slightly lower at 1520. The MOPE and smoke from CNBC was that gold was “crushed” on the day. What do you think? Does it appear that gold was “crushed”? I find great entertainment in the propaganda, please do not take anything you hear from MSM as the truth. Resistance is where the Evil Empire has decided they must stand, at 1547. Stochastic has crossed the 80 signal line and suggests the nearest moving average will be the initial price target, in this case the 18 day moving average at 1525. So, essentially we are already there. Very strong support would be the 1474 area. Price action in gold is not indicative of a blow-off or cascade lower, but simply a grind sideways. The next crisis or move in speculation regarding the upcoming QE round will send gold out of its trading range for a new high.
PHYS, the real and 100% allocated gold fund, closed lower just above support near 13.15. Sprott’s Physical Gold Trust (PHYS) has the gold, serial numbered and sequestered at the Royal Canadian Mint. The likes of GLD and Kitco however hold unallocated gold, otherwise known as “paper gold.” This type of gold exposure is really exposure to someone elses liability. This is also known as debt. Do not be fooled. Paper lends itself to fraud, just look at Kitco and the Comex.
As it turns out, the low of the day found support right at the 20 day moving average. This is where you you normally look for support given that stochastic has crossed the 80 level downwards from an embedded state. Price will target the first available moving average in this case. The next support zone will come from the 50 day moving average, currently at 13.06. MACD is putting a bearish cross and RSI is dead neutral. Technically speaking, the chart is neutral currently with a higher high and a lower low. Indecision is the idea here. Gold is just hanging around waiting for a spark, and PHYS is 100% gold. This is the fund that you have to be in if you have investment in 401k or other company sponsored retirement funds. All other investments should be in the form of physical gold in your possession.
Silver also closed lower on the day at support of 36.20. The chart is basically neutral and is moving sideways with a down bias. Further support exists lower around 35.30. Very solid support at 33.50 and solid resistance at 38.50. This channel represents the status quo right now until something comes along to solidify sentiment. The technical studies are neutral indicate indecision and consolidation. Silver is going to be held hostage by poor economic numbers. Remember, gold is the future money, silver is not. Silver will follow to a certain degree but will eventually fall far behind gold. Use silver as a short term trading play, but avoid long term investment to preserve wealth.
PSLV is Sprott’s silver counterpart to PHYS and gold. Again, if you seek exposure to silver within the confines and rules regarding retirement funds such as 401ks and defined contribution plans, you need to find a vehicle that possesses real silver and not an IOU for silver. PSLV is the fund that holds 100% silver bullion in fully allocated form at the Royal Canadian Mint.
Price closed down more or less at support around 16.15. This chart is basically neutral with a bias lower. Technically speaking we are in a brand new short term downtrend with a confirmed lower low to go along with the latest lower high on Thursday. I see the 100 day average trying to support the current price. If it fails, then we are off to support at 15.0. Stochastic and RSI are headed to over-sold territory and i would expect a move to 15.0 will put both of these technical indicators firmly in over-sold regions. This would be a rather low risk entry point for silver IMO.