Gold and Silver – 7 Sep

Gold intervention is underway in order to cap price at the 1900 level. Current price pre-market is 1836. The head and shoulders capping operation was a failure, now the double top operation commences, in this case approximately 1500.  The Double Top is a reversal pattern where price achieves a level for the second time and then reverses, offering a projection equal to the height of the double top from base to peak. The speculative bears are keying on this development as they keyed on the potential head and shoulders reversal. Central banks understand this and offer the pattern to spur exit form long positions and the creation of fresh short positions. This is the essence of the paper gold market. Don’t be fooled. They do this to facilitate the flow of gold, the lubricant for global economic activity.

The chart certainly says a double top is possible. 2 beautiful peaks, where the second one was formed on lower volume. Classic. Support is coming from the last swing low around 1815, followed by the 18 day moving average at 1811. The Fibonacci 38.2% retrace comes in all the way down at 1749 and provides a deeper and natural layer of support. Resistance is the Bollinger band and the all time high near 1917. For now it appears price will find resistance at the median line in the Andrew’s Pitchfork. The up trend continues as long as the swing low at 1815 holds support. Just buy the fucking dip.

PHYS actually closed higher on the day and in doing so increased its premium to net asset value share price to 4.6%. So what we have is a 2% discount in GLD (unallocated paper gold) and a 4.6% premium in PHYS (allocated real gold). Hmmmm? Could Freegold be on the way? Bet on it.

A gap appears on the chart around 16.10 and will likely fill. Support is the last swing high at the bottom of the gap. Further support lies just below there at the 20 day moving average, currently at 15.77. Resistance is at the all time high of 16.86.

Silver closed down on the day and was acting more like a commodity than gold’s monetary cousin. The chart in silver is far less susceptible to sharp sell offs generated by chart painters set on manipulating price. Silver continues in a short term up trend defined by higher highs and higher lows. It is doing this within a larger trend channel that goes back to early July. Silver appears to be building a substantial base between 38 and 42. Support is coming in at 41.20 and just below at 41.13, the 18 day moving average. Resistance is the swing high at 43.50. The technical studies continue to move sideways and suggest consolidation and further base building.

This entry was posted in Gold, Matrix Sentry TA, PHYS, Silver, Technical Analysis. Bookmark the permalink.

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