Saturday, 31 December 2011

Jim Rogers on silver and gold.

Jim Rogers sees long term trends and here is what he thinks about silver and gold:

"I think silver will be a great place for the next 10-20 years."

"It would not surprise me to see gold go to US$1200 – but if it goes that low I’d buy a lot more – gold has been up 11 years in a row it deserves a substantial correction."

Source: CNBC, 29 Dec 2011.

The story has not changed.

I am looking to buy more gold and silver on further price weakness.

Related post:
Silver: Searching for support.

Friday, 30 December 2011

Silver: Searching for support.

Silver formed a white hammer in the last session, closing at US$27.70. This is a single candle reversal signal which has to be confirmed. If valid, we could see price heading higher and testing resistance provided by the declining 50dMA once more. The 50dMA is currently at US$32.05.

The 50dMA has proven itself to be a strong resistance, pushing prices lower in November and early December when it was tested. It would take some extraordinary buying pressure to break through this wall to go higher. I expect traders to recognise this as well and many sellers would be waiting to sell if the 50dMA should be tested.

Looking at the MACD, it is in steady decline in negative territory. However, not reaching the depths it did in October is promising. We could see the formation of a positive divergence. A lower low in silver's price with higher low in the MACD would be a buy signal for me.

If I do buy some silver upon sighting a positive divergence, would I hold forever? Probably not. It would probably be for a trade and I would probably sell at resistance. Why?

Looking at the weekly chart, the MACD is still plunging. Momentum over the longer term is clearly negative with no reversal in sight. Although decreasing volume with continuing price weakness is encouraging for long holders, price could drift lower. I would like to see major support provided by the 200wMA tested before making my next move.

Tuesday, 6 December 2011

What are Jim and Marc saying about gold?

Investment gurus Jim Rogers and Marc Faber in recent interviews seem to agree on the dynamics in the gold market. Rogers says he’s not selling his gold and Faber says there is no bubble. But that doesn’t mean bullion is not still in a correction phase.

Dr Marc Faber, “when you buy gold, it’s an insurance against systematic failure and problems in the financial markets.”

Read full report: click here.

Thursday, 1 December 2011

Silver is testing resistance.

Silver has been forming higher lows. Could it form a higher high next?

Momentum oscillators have been exhibiting encouraging signs. We have a higher low in the RSI as well as the MACD. Indeed, the MACD looks like it is on the verge of a bullish crossover with the signal line. However, it remains in negative territory and we could be seeing just a rebound. The rising RSI is touching the 50% line which in this case could act as resistance.

Although forming a white candle in the previous session, price is still being resisted by the 50dMA. The 50dMA has, in the past, proven to be a formidable resistance which pushed the price down as it was tested repeatedly earlier in November.

With the MACD still in negative territory and the RSI coming up against the 50% line as resistance, the 50dMA could be hard to overcome once again. If, however, it should be overcome, expect resistance next at the 20dMA which is currently at US$ 33.30 an ounce.

Having said this, if the 50dMA could be overcome convincingly, resistance posed by the 20dMA should be less of a problem. We could eventually, then, see the 100dMA tested. That is at US$36.51 an ounce now.