Gold is in the bump phase of a seven-year Bump-and-Run Reversal Top pattern which typically occurs when excessive speculation drives prices up steeply, and is now at a critical juncture which could change the long-term trend of gold. Silver is already in the run phase which does not bode well for its future price. Let me explain. Words: 743
So says Dr. Nu Yu who goes on to say:
According to Thomas Bulkowski, the Bump-and-Run Reversal Top pattern consists of three main phases:
A Look at the Future for Gold
The seven year weekly chart below for gold offers a cautious early view regarding the long term trend of gold and is an updated version of a previous newsletter.Gold has been in the bump phase of the Bump-and-Run Reversal Top pattern since late 2009 after almost three years in the lead-in phase.
As can be seen in the chart below the major decline over the past few days has dragged the price of gold sharply below the sell line which suggests the formation of a long-term Bump-and-Run Reversal Top for gold.
If prices keep staying in the territory under the sell line, gold could get into a bear market going forward into 2012 with downside price targets as follows:
A Look at the Future for Silver
Silver also has a bearish picture with a bump-and-run reversal top pattern in its intermediate-term timeframe. Silver has been in this run phase for some time as I pointed out in my earlier newsletter.
As can be seen in the chart below, silver has been oscillating between the first and second target lines for almost three months and appears to be on the verge of breaching the second target line.
Silver could get well into a bear market going forward into 2012 with downside price targets as follows:
There you have it. As I have been saying for months now in my previous newsletters, as supported by my technical analyses as evidenced by the charts above, the outlook for gold (as low as $1600 and conceivably as low as $1000) and silver (as low as $31 and conceivably as low as $24) look rather bleak in the short term at least.
It should prove to be a very interesting 2012.