The following comments may not be what one wants to hear, but charts tell what the reality is behind any market, and we are just the messenger delivering the chart-driven message. It is one we have been saying for the last 4 to 5 years, with regard to not being on the long side in the paper futures market. [Let’s take a look at the most recent charts for gold and silver.]
By: Michael Noonan
Gold – Monthly Chart
The monthly chart below is not a pillar of strength as price continues to recede lower and lower with no meaningful rally attempts that would reflect the reality of actual physical demand…
The higher controlling pattern in the chart below shows no sign of an impending turnaround in the price of gold. However deflationary…this may sound to gold and silver enthusiasts, and we are among them, the alternative, fiat, now soon to be digital world currency, is even less appealing. Time remains on the side of the globalists, for now.
Gold: Weekly Chart
The best read for price behavior moving forward is its overall past with an emphasis on its present developing market behavior, and that behavior does not show a break in pattern to the downside…
Gold: Daily Chart
We keep looking for signs of a turnaround without seeing any. Rallies have been weak. Note how far away a 50% retracement is on the weekly chart below. Half-way retracements are used as a guide to gauge the character of a trend. For as long as a down trend can keep rallies from extending past 50% of the last swing decline, the trend is in no danger of ending. When price cannot muster much beyond just a 25% reaction rally, the activity speaks for itself.
Silver: Monthly Chart
Silver has a slightly different structure to its down trend, but it remains entrenched in its trend lower. The monthly shows no signs of encouragement that price has reached and/or is making a bottom.
The Gold:Silver Ratio
[As an aside,] when one continues to buy physical gold and silver, it is silver that will more than likely provide the best return on exchanged paper currency. The gold:silver ratio is now around 77 to 1. Every ounce of gold has an equivalent value of 77 ounces of silver. Ten oz of gold would yield around 720 oz of silver, accounting for transaction costs.
The historic ratio between gold and silver is said to be around 15:1, even 25:1. Should the ratio return to say 35:1, for the sake of argument, the 10 oz of gold exchanged for 720 oz of silver can now be reversed. The 720 oz of silver can be exchanged for just over 20 oz of gold, say 19, after transaction costs. The previous holding of gold, 10 oz, has now become 19 oz without ever having been out of holding PMs.
It may take years for the ratio to rebalance from 77:1 to lower, but so what? One’s holdings are still going up in value for little to no risk. A thoughtful silver lining in the chart cloud.
Silver: Weekly Chart[As evidenced by the weekly chart below] the silver market has shown an inability to mount any kind of meaningful rally over the past few months, despite a few falsely encouraging rallies intervening.
Silver: Daily Chart
The message is no different in the daily silver chart. Much more evidence is needed before one can entertain any thoughts for a change in trend. The most positive aspect for silver is the fact that the gold:silver ratio now strongly favors buying/owning physical silver over gold.
Prices for both metals are cheap, despite what some may construe as not so favorable an outlook for PMs, at present, but that is exactly what the globalists want from people:
- to get as many people as possible discouraged in their faith for buying/holding PMs;
- to create false fiat gods;
- to destroy all beliefs that gold and silver will again be a storehouse for value.
- Rinse and repeat.
Always remember, the globalists who want to instill that false paradigm are the same ones who are issuing trillions and trillions of worthless so-called money, and no regime, from the beginning of civilization, has ever escaped from the collapse of every Ponzi scheme, including the current one that has been extraordinarily stretched beyond imagination, let alone far beyond reality tolerance.
If you feel disheartened, it is three rotten cheers for the globalists. If you want to take a stand against them, keep the faith. Keep your precious metals.
The time for change has not yet come, but it will. It is lunatics that are running the show – for now.[The original article was written by Michael Noonan (edgetraderplus.com) and is presented above by the editorial team of munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (see sample here) in a edited ([ ]) and abridged (…) format to provide a fast and easy read.]
Want more such articles? Just “follow the munKNEE” on Twitter; visit our Facebook page; or subscribe to our free newsletter – see sample here.
Related Articles from the munKNEE Vault:
Because we know the trend is down, there is no guesswork about trading from the long side in paper gold. There is no need to “predict” the price direction. Just wait for more information that buyers are beginning to increase (which they are not, so far), and then have a strategy for buying in a changing up trend. Presently, there is no evidence of a change to an up trend, so wait for confirmation and keep one’s powder dry.
Should you buy & hold your gold or silver or switch back and forth depending on the gold/silver ratio? This article examines 3 scenarios and identifies certain rules that should be followed to make the most of the ups and downs of the gold/silver ratio to substantially increase your holdings over time.
If you have no gold or silver, you will be “Greeced,” “Cyprused,” or otherwise financially screwed for not taking responsibility for your own economic future. Those who already own either or both gold and silver know this although they still foolishly complain about the paper price continuing to decline – and that focus is grossly misplaced. Here’s why.
The majority of analysts maintain that gold will reach a parabolic peak price somewhere in excess of $5,000 per troy ounce in the next few years. Given the fact that the historical movement of silver is 90 – 95% correlated with that of gold suggests that a much higher price for silver can also be anticipated. Couple that with the fact that silver is currently greatly undervalued relative to its average long-term historical relationship with gold and it is realistic to expect that silver will eventually escalate dramatically in price. How much? This article applies the historical gold:silver ratios to come up with a range of prices based on specific price levels for gold being reached. Words: 691
Given the fact that a) the historical movement of silver is 90 – 98% correlated with gold, b) silver is currently greatly undervalued relative to its average long-term historical relationship with gold and c) many analysts predict a parabolic rise in the price of gold over the next 5 years it is realistic to expect that silver will also escalate dramatically in price – but by how much? This article applies the historical silver to gold ratios to come up with a range of prices based on specific price levels for gold being reached.
Not every trade will necessarily result in a profit, but over a series of trades you will make money, guaranteed, if you have a defined set of rules that captures the full range of trading opportunities discussed in this article. Trading is a business and needs to be treated like one where you are the center of every decision.
There are two things we know for certain about gold and silver: 1. fundamentals do not apply currently, and 2. there are no signs to indicate an end to this half-decade old bear market.
If the East has gained control of the gold, and the West is essentially insolvent to its core, why aren’t gold and silver finding a higher level that, at a minimum, would reflect a simple adjustment for inflation for the past few decades? The answer is really quite simple: the “Rothschild formula” is is alive and well. Let me explain just what the Rothschild formula is and how it is influencing the price of gold.
Here’s the best reason to buy and hold gold and silver, at any price, and especially at these artificially suppressed prices.