Is the party over for Gold and Silver?
I see oil making new record prices day after day, but continue to see gold trading in the low $900s. Looking at the price charts, I see that gold and silver peaked in mid March, with gold hitting $1,000+ and silver over $21 per ounce. The last 30 days for the metals look very trading range bound. I am not an expert in any commodity or a chart guru, I just think something is coming unbundled here and I have a few theories:
- Gold bugs are running short on new converts, putting a dent in supply/demand. I have a little trouble believing this with all of the noise you will find about any financial news concerning precious metals.
- Commodity inflation in general is starting to stall and the precious metals are the leading indicator.
- Dollar weakness will end, driving the aggressive money out of gold/silver into the dollar. When/if the dollar turns stronger, the pile on could be huge, seriously affecting gold and silver prices in dollar terms.
I looked at some historic pricing and gold traded in the $250 to $300 range from October 1999 until February 2002. About 28 months starting and ending at $300 with only one excursion up to $300 during that time. Is this type of trading range starting again? I am not a predictor, but the chart shows an interesting possibility:
I like these charts. Click on the different symbols to get perspective.
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
No comments yet.
Leave a comment