Gold & Silver Catching Breath - Possible Buying Opportunity?

Gold is putting on a very strong performance. The graph shows the last and new trading range. Through the months and years, we have been treated to higher trading ranges after a time of consolidation. However, this time, the time period seems to have been cut to a few weeks. Note the upward trough established as gold price rushed ahead to about $1060 over night. The RSI and the MACD are very strongly positive. At the very bottom of the MACD we see that the volume is positive and not even half way through the upward volume patterns of the past. This is all very strong technical indication that gold is going higher sooner than most expected. The one detractor is that intraday, early today, the price is near the lower red trend line of the trough.

Is it just my imagination or does it appear (green) today that gold is being hammered each time it reaches $1050. That is real suspicious. Nevertheless, gold is being bought each time it is capped.

Silver shows similar action with the capping being on the approach to 17.70. I wonder what is going on. Do you think the boyz are at it again? By the way, reports are that banks are diversifying out of more dollars with some of the reserves being reinforced with gold. SLV is still having trouble obtaining the silver it needs to cover the shares sold and they are reported to be playing with shorts without the underlying silver. Could be? I do not know for certain.


A video on immigration from MyHeritage.org may be viewed HERE. It is a discussion pointing out confusion on immigration enforcement by local police.

More on Dr. Copper from MineWeb.com:

Copper to post new records, but aluminium may have the greatest upside - RBS

As commodities move from investment pariah to the "darlin' of the diggin's' in just a few months, RBS looks for more vibrancy for the longer term - but the base metals have mountains of inventory to climb first, so don't be fooled by what has gone before

Author: Rhona O'Connell
Posted: Friday , 09 Oct 2009

LONDON -

The Royal Bank of Scotland has released its latest Commodity Companion, covering base and precious metals, iron and the energy complex. Among the major conclusions are the belief that copper will make new record highs by 2013, but that from current prices aluminium may well have the greatest longer term upside.

RBS is looking for world GDP to rebound by 3.6% in 2010, but is looking for commodity prices to pause for breath after their recent strong rallies. Thereafter the picture brightens considerably. Read it HERE.

Speaking of copper, look at PCU (Southern Copper). Talk about a strong move with indications of further upward pricing. Here is another example. The volume is increasing and the RSI and MACD are both positive. This is one which I like to play with options. I am looking into that now.

From MineWeb.com:

LEVERAGE KEY

Marginal gold stocks will benefit most if gold price stays above $1,000

Leverage is the key to the possibility of still making good gains in marginal gold stocks should the price continue to rise - or at least remain above $1,000.

Author: Lawrence Williams
Posted: Thursday , 08 Oct 2009

LONDON -

With some gold junior stocks gaining over 1,000% since last October's meltdown in prices the investor may be wondering if such gains are still possible as the yellow metal continues on its upwards path. To an extent this obviously depends on the strength and duration of the gold price, but with most gold juniors still well below their pre-crash levels there do have to be opportunities out there for the discerning investor who does his/her homework - albeit with increasing risk.

There does seem to be a consensus among most gold analysts that $1,000 gold may well be here to stay, and there certainly seems to have been strong resistance over the past couple of weeks to the price falling back through $990 - and then again yesterday against it falling back below $1,040, but as we all know high and low resistance points are mostly eventually breached, so nothing here is certain. The general expectation does seem to be that gold is headed for $1,200 - perhaps this year. If this is the case then there are almost certainly a good number of bargains to be found still in gold stocks - particularly among producers with relatively high cost levels and among some of the explorers with large low grade mine potential. Read it HERE.

Our speculative Bullion Monarch Mining is just such a stock. It is trading at 0.70-0.80, so one can purchase a large number of shares with minimum investment. On these, I like to buy in with small bites $500 - $1500 as the price moves upward. The leverage offered when the gold rush gets going will be surprising. This might be one of those that makes it to $5 when the late coming lemmings jump on at the last minute. Of course, it might not. That is why it is a speculation.

From MineWeb.com:

CHINESE GOLD BUYING TO CONTINUE

Record gold prices not scaring Chinese buyers

Many Chinese gold investors have already climbed on the bandwagon and, in the absence of attractive alternatives, are reluctant to jump off

Author: David Stanway and Alfred Cang (Reuters)
Posted: Friday , 09 Oct 2009

BEIJING/SHANGHAI (Reuters) -

Gold might be a luxury most can live without when times are hard, but for cautious investors in China, the world's top producer and consumer of bullion, it has become a matter of necessity.

Jewelry sales might take a hit in China after prices hit a record high of $1,043.45 an ounce on Tuesday, but amid ongoing economic uncertainty, many in the financial community still prefer bullion to bonds, analysts said in comments made before the record was struck.

The government itself -- also looking for a safe haven for its foreign currency reserves -- is also likely to increase its gold holdings, which now officially stand at 1,054 metric tons. Read it HERE.

This must be creating a new heavy demand which is moving the precious metals upward of late.

Here are the miners from Scottrade streaming quotes:

If you are not already on board or would like to add to your portfolio, I like DROOY below 7.50; HMY below 11.50; HL below 4.60; and VGZ below 2.75. Remember these can always go lower. I am looking to buy move on any dip. Gold will go higher. When is the question, we must leave to our God who is in control. We are to do the best of which we are capable, but to leave the results of our actions to Him. Then we must praise Him for whatever results He gives us.

Gold is 1049.90 and silver 17.76 with both on down ticks (possible buying time soon). The DOW is up 24 @ 9810.84. Early in the trading today.

Best to each, Doug