Gold & Silver Cycle Charts Look Constructive

Although no price appreciation since writing the weekend report, the Gold Cycle nevertheless is constructive.  We’ve seen a 14 day streak that has quietly and patiently added 4.3% since the last Cycle Low.  The fact that gold has generally ascended (while dips bought) for 14 days has almost ensured that our Cycle phasing as a 1st Daily Cycle is correct.  This is important; the first step is to understand which Cycle we are in.

But gold continues to do a wonderful job of confusing investors while keeping sentiment subdued.  The lack of a surge out of deep lows has kept many lightly exposed and believing that a new decline is directly ahead.  I’m also afraid those who are faithlessly invested here might be shaken out by what should be an imminent and minor 2-3 session drop into a Half Cycle Low.

Gold Daily Chart 23 January 2013 gold silver price news

So if we remain committed to the 1st Daily Cycle framework, then we must be ready to accept a minor Half Cycle decline on the way up to a much larger 1st Daily Cycle top.  These 1st Daily Cycle average a full 28 trading days, so there is plenty of time and no reason to expect a significant move above $1,700 will not unfold.

If Silver is any indication of the coming strength, then we’re in good hands.  The action out of Silver is showing extreme strength, the type of move that 1st Daily Cycles are known for.  Whenever Silver makes a bullish move, it quickly finds the top of the Bollinger Band and rides it all the way to a Cycle top.  Seeing this type of development here is encouraging, you want to see Silver leading the pack.  This move has been deliberately strong while not overly exuberant.  We’re not seeing the extreme moves that land Silver outside of the Bollinger Bands that often mark the end of a premature run.

But as gold is in need of a Half Cycle Low and Silver extended in the short term, I expect that Silver’s powerful 8 session winning streak will need to take a breather.  A quick move back to the $31.50 level over 3 sessions would be more than enough of a “re-charge” before Silver sets off into the 2nd half of the Cycle.

Silver Daily Chart 23 January 2013 gold silver price news

But the miners continue to cast a grey cloud over the gold Cycle.  Maybe this weakness is helping to mask sentiment; it could be what is helping gold/silver rally here.  Whatever the reason for the extreme negative sentiment and technical weakness, lets again hope it’s not a leading indicator for the gold Cycle.

The best hope for the miners is that they’re forming a 3-4 month rounded bottoming pattern while gold begins the process of moving up in a new Investor Cycle.  I have noted before that the miners have appeared to bottom and look to be in the process of forming a solid base or foundation.  If this were true, then we should expect to see a little more weakness followed by the beginnings of a long, powerful, and sustained rally.  But the threat is that the rounded bottoming pattern gives way and followed by a test of the Dec lows ($43.70 area).  Failure to hold that level should open the gates for a swift 10% drop back to the $40 level.

GDX Daily Chart 22 January 2013 gold silver price news

This as is an excerpt from this mid week’s premium update published on Wednesday (1.23)  focusing on precious metals from the The Financial Tap, which is dedicated to helping people learn to grow into successful investors by providing cycle research on multiple markets delivered twice weekly, as well as real time trade alerts to profit from market inefficiencies. They offer a FREE 15-day trial where you’ll receive complete access to the entire site. Coupon code (ZEN) saves you 15%.


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  • david parker

    The miners have broken down and the metals will in the next few weeks follow the miners to the down side. Take down this article. Your cycles analysis is not working and only helping your subscribers lose money.

    Embarrassing stuff really.

  • goldsilverworlds

    david parker Thanks for your reaction, I see your point about the miners and it is a fair one in my personal opinion. I will take your comment serious and look into the gold cycle analysis service by one of the contributors of this site. Please feel free to drop me a message (contact form) if you want to share more details.

    Just a generic message: this site aims to be an open platform for people who want to share a well argued view or commentary about precious metals.

  • http://twitter.com/TradePoly Poly

    Hi David,

    Firstly, there were no open miner positions before or after this article and I’ve warned against holding the miners for months now. These are possible scenarios for where the asset might be headed.
    You will also note in the article I write “Failure to hold that level should open the gates for a swift 10% drop back to the $40 level.” I would say it has unfolded exactly as I stated.