Silver

If enough cash based buying enters the physical silver market then regardless of the silver market fundamentals (which are supportive) the price will quickly rally. The move should be similar to the second half 2005<> first half 2006 in which silver climbed about 130% in 8 month. 12.30$ today is like 6.70$ in 2005 so the target is about 27.80$ which is between the short and long 261.8 Fibonacci levels.


Spot Silver {XAGUSD} Weekly Log Chart

Today commentary

It might be the case that criminal acts, corruption and the highest level of abusive acts against people's freedoms are taking place. Authorities all over the world have pushed themselves into the darkest corners. Top academics and high rank officials are refusing to admit their own mistakes which are based on false economic theories. One should be careful and consider all options. Disinformation is running at extremely high level but the trend is changing with the expansion of the internet and generosity of moral people.

In regard to gold, silver, forex, stocks or any other market - you should spend your time better by learning the charts, particularly the long term charts. Charts are the most efficient and concentrated data you can find. Learning charts is not an easy task and the short term charts are vulnerable to abusive manipulative acts, paint the charts they call it. Fundamentals, fundamentals, fundamentals, learn history; concentrate on numerical facts not opinions. It is best when the technicals and fundamentals point in the same direction.


Good Luck, for peace, freedom and prosperity…

Update

It appears that after yesterday slump some technical repair is currently taking place. This is not the time to sell gold and silver as February 26 was not the time to buy. Yesterday action is nothing new for anyone watching the precious metals, gold has seen moves of ~ 40$ in 24 hours more then once , sharp moves like that are typical at bottoms or tops though it is not always the case.

For readers who need to buy physical gold and silver this is a rare opportunity and you might want to buy a larger amount then you normally do. Long term investors which buy gold physically or gold funds can enter the market gradually. Speculators need to be on the watch for buy signals.

I see quiet a few bearish gold articles with targets of 600$ and 570$ which should be viewed as a contrary indicator (The majority of investors and traders tend to be bearish at bottoms and bullish at tops). It appears there is allot of speculative short selling taking place with intention to capitalize on a falling gold and silver prices. Are the short sellers getting over confident? Time will tell…

If you think like I do that gold is in a multi years / decades bull market then you have to be bullish most of the time , sometimes natural but never bearish.

Overall, initiating bullish positions with medium to long term time frame seems favorable both in terms of price and time.




Bill Cara has posted about Gold mining costs and you might want to read that:

Goldminer Report

Real Drivers of Gold

The annual mine production of gold is around 2500 metric ton. The notional amount of gold over the counter (OTC) derivatives is 463 Billion USD (BIS Dec 2006). This numbers alone support much higher gold price, just do the simple math.

This is only small part of the story as Total OTC derivatives (most are interest rate contracts and credit default swaps) amount at 415 Trillion USD. Gold derivatives are just 0.1% of the total amount. Compare that to an annual total world GDP of about 70 Trillion.

In addition it is strongly recommended that you review this post : Gold Market Overview


Gold Anti-Trust Action Committee(GATA) documentary video(2005)

Gold , Silver

Gold and particularly silver are down sharply today. Gold and silver are about at the same point as in the beginning of the year and April 2006. Volume at futures exchanges was large. It was like traders got scared that their gold would catch rust. I estimate that the high volume was due to fundamentals, value and de hedging.

Dow Jones /Gold ratio making new highs, inline with recent out performance of stocks vs. gold. My opinion is that Higher gold price will be necessary for the continuation of the stocks bull market.


Gold (XAUUSD)



















Silver (XAGUSD)



















Some of you might want to read this article : Booms Were Made to Go Bust(Robert Kiyosaki)