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All Hail the Mighty Silver Bugs...

Precious metals expert Michael Ballanger examines silver's recent moves upward.

LL

In my business, there is a great deal of travel, be it to properties in the Peruvian Andes or the Canadian Yukon or to the investment conferences in New Orleans or San Francisco or London, so I get a full psychographic cross section of every type of investor imaginable. First of all, the audiences I have encountered at the "Sound Money" conferences in Nassau or Bermuda are usually quite conservative and usually well-dressed and well-groomed. When the topic is gold and it is a controversial speaker looking for "the end of Western civilization," the audiences tend to be a tad different with hair length and dress code noticeably more avant-garde.

However, when the topic is confined to silver, while the speakers tend to be "evangelical," the audiences appear to be (operative word being "appear") simply stark-raving madmen of the first order. They usually dress in military fatigues, the males are all in ponytails, the women weigh more than the men, and the T-shirts and baseball caps on both males and females carry logos from either the WWF or the Monster Truck conventions. However, they are usually quite erudite when discussing "survival techniques"; they are usually extremely well educated and they are all able to rhyme off the silver production numbers for the past 20 years BY COUNTRY; and most importantly, they carry high distain for anyone who fails to know these facts. [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/bIkOdeGRGww/16946

Topping Euro Signals New Highs For Precious Metals

Aibek Burabayev - INO.com Contributor - Metals


This past January I wrote about European gold discussing two possible scenarios as the market was at the crossroads. The upside scenario played out. It is good to act once we know the direction as it gives us more confidence. Today I will review gold vs. euro and add silver to the pack. But the very first chart I will dedicate to the peaking euro as the price of the metals is quoted in a single currency.

Chart 1. Euro/$ Weekly: Price Is At The Top

Weekly Chart of Euro/Dollar
Chart courtesy of tradingview.com

The EURUSD is the most liquid currency pair in the world and it shows the strength of the US dollar, which is the measure of everything in the financial world. The global trend for the pair is down. The Euro hit a multi-decade bottom in 2015 and since then we have been stuck in a wide consolidation with a price range of 10 big figures within $1.0462-1.1467. I didn't take the 2015 high at $1.1714 as you can see that it was just a false break above the horizontal resistance. The price quickly fell back below resistance and closed a dip below it.

Last week shaped a reversal Doji candle, which, of course, needs further confirmation on the chart. We should see a quick drop below the middle of the channel (black dashed line) at the $1.1240 level.

The euro should break below $1.0462 to confirm the continuation of the global trend; it will certainly add to the bullishness of precious metals against this currency. If we get a weekly/monthly close above $1.1467, then we should watch closely after the reversal which will undermine the metals market in Europe. The third path is a prolonged consolidation as a result of the price reversal from the lower margin at $1.0462.

Chart 2. Gold vs. Euro Monthly: Break Up & Correction, Ready For Action!

Monthly Chart of Gold vs. Euro
Chart courtesy of tradingview.com

Gold was nimble enough to penetrate the upside of the downtrend at EUR 1065 in February. It is a good trigger for buyers. Patient traders prefer to wait for a good pullback to enter with safe stop (just below the trend) for a low-risk trade. And we can see this classic price action on the chart. It looks like the pullback has finished at the low of EUR 1065 (same price for the breakup) as the price rapidly advanced higher. Once the price passes the high at EUR 1165, we can move the stop to breakeven and enjoy the lossless bet.

The target is located on the upside of the trend at EUR 1270, if you read the earlier gold-euro post, you can see that the AB/CD concept also points to that level (EUR 1272). It's not a coincidence as both the trend model and the AB/CD concept use simple mathematical calculations.

Chart 3. Silver vs. Euro Monthly: Wait for Breakout!

Monthly Chart of Silver vs. Euro
Chart courtesy of tradingview.com

Silver didn't follow gold yet. Indeed, the price penetrated the dashed red trendline last October, but we didn't see the follow-through upside price action so far. Instead, the metal has been squeezed with a decreasing apex of the symmetrical triangle (highlighted in blue), one of the typical visual forms of consolidation.

It's good to trade on the breakout. The most expected action is upside penetration of the triangle amid rising a gold price. The target for the upside move is located at the EUR 18.75 level, calculated as a distance of the base (EUR 4.9, the widest part of the triangle) added to the break point. This is the area of the 2013 August high. In a less probable downside scenario the target is set at EUR 7.73 level.

Intelligent trades!

Aibek Burabayev
INO.com Contributor, Metals

Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.

Silver Update: This Cup Should Refresh Bulls

Aibek Burabayev - INO.com Contributor - Metals


Code Orange

In my previous post I warned bears to be alert to the changing trend as strengthening signals started to appear for Silver. This month I think the proper code for the current bear market is orange. The orange level requires sellers to be prepared for the anticipated worsening of conditions.

Chart 1. Silver Monthly: Second Attempt to Break Up

Monthly Chart of Silver
Chart courtesy of tradingview.com

I added the Fibonacci retracement level on the chart to show you how deep the silver price drop is. The 78.6% is usually the last level of correction, where most buyers have already jumped out of their long positions. The metal stopped falling right above it. For comparison, gold retraced only 50% of the rise and it has some room for further weakness. [Read more...]

Silver Update: Killing It Softly

Aibek Burabayev - INO.com Contributor - Metals


Experiment Results

It's time to check the results of my silver analysis. Back in November, I wrote an update on silver, in the first part of which I made an error analysis session of an earlier post and in the second part I added an experimental clone chart. There were two calculated targets: a price target and the time target.

In December, I was out of patience and was going to write a post once silver hit the price target. But it was crucial to wait until the time came to check both results on the date outlined in my earlier post. Below I've included the experimental clone model chart from my earlier post and added fresh comments highlighted in red to show the results and changes for your convenience.

Chart 1 Silver Weekly: Amazing Math

Silver Weekly Chart
Chart courtesy of tradingview.com

What do we see? Let’s start from the pleasant result. Yes, the price target was hit accurately almost cent to the cent: The $13.65 projected target versus the actual low of $13.63 in December. I was really surprised by this outcome as it strengthens my confidence in the world of numbers. By the way, the AB/CD concept target ($13.7) from my September post has also been hit. [Read more...]

Veteran Investor Rick Rule Reveals a Unique Arbitrage Opportunity

One of the hardest things for a mining executive to do may be nothing. But in a market that is not rewarding companies for pulling resources out of the ground, Sprott US Holdings Inc. CEO Rick Rule would prefer to see what he calls "optionality" rather than dilution from companies looking to justify salaries. In this interview with The Gold Report, he praises innovative precious metals streams on base metal projects and one Canadian company that is adding value and being rewarded for it.

The Gold Report: In November, you called the bottom for precious metals. Do you still believe that we're in the bottom?

Rick Rule: Yes, as long as you can define a bottom gently. I said in that same interview that the most important factor in gold pricing was the fact that it was priced in U.S. dollars, and we see a topping in the U.S. dollar. In fairness, Karen, if you had asked me that same question two years ago, I would have responded in the affirmative and been quite wrong. But I do think the upside in gold is both larger and closer than the downside in gold.

TGR: Now that the Federal Reserve has increased the key interest rate slightly, the expectation is that the value of the dollar will increase relative to other currencies. How could that be the sign of a bottom for gold? [Read more...]

Article source: http://feedproxy.google.com/~r/theaureport/Ajgh/~3/dD3lg3hefPU/16859

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