The war in the gold and silver markets continues to rage, even as investors worry about China’s stock market as it reopened for trading today, so King World News is pleased to share two fascinating pieces which features a key illustrations about what is really happening with the price of gold and silver.
October 8 (King World News) – War In Gold And Silver Continues To Rage
There has been massive retail demand for physical silver all over the world, and today a technician from a Swiss investment firm sent King World New the following image from the Perth Mint site. It seems they have run out of available 10 ounce, one kilogram, and 100 ounce silver bars (see below):
KWN will keep a close eye on the retail market for silver to see if this condition persists. In the meantime, below are important notes from two of the greats in the business.
Louise Yamada METALS: Gold – Narrow Volatility
Gold Spot price (GOLDS-1,138.82, see Figure 24) remains in a structural bear market from a technical perspective. The lower peak in 2012 and the two-year support break in 2013 defined the bear market. Each subsequent rally has failed at a lower peak (selling into strength), and the 2014 break through the 2005 uptrend extended the negative profile as Gold achieved our progressive lower targets, 1,400, 1,200 1,100 with 1,000 remaining an outstanding target. Both weekly and monthly momentum models (not shown) remain negative albeit flat, without immediate conviction.
If we take a look at the recent behavior on a daily basis (see Figure 25) and zero in on 2015, the configuration of a symmetrical triangle has evolved, both lower highs (supply, selling) and higher lows (demand). Symmetrical triangles generally resolve as the spring tightens, and usually, but not always in the direction from which price came. As we go to press, the surge in price is attempting another test of the upper barrier. We’ll see what the resolution will be.
If the support of the prior pullback level, at 1,100 is breached, our next target at 1,000 comes into view. Were price to lift through the most recent resistance rally peak at 1,153, then price might address the next resistance at 1,170 followed by resistance at 1,200 which has proved difficult to overcome.
And finally, this is from Art Cashin’s note today: Overnight And Overseas – Shanghai reopened after a full week closed and rallied 3%. That was a disappointment since the market had risen nearly 10% in the closure week. The relatively limp action in Shanghai appears to have brought renewed selling in the commodity sector…Crude, however, is trading a bit higher. Tokyo, Hong Kong, and India are all lower.
Over in Europe things started out lower but have turned more neutral as midday approaches. Volkswagen is up despite this morning’s Congressional hearing. Glencore is under pressure again. Bad export data from Germany put pressure on the Euro. The yen is trading higher as are Treasury yields.
Consensus – Several Fed speakers but on the Fed front most attention will go to the release of the FOMC minutes at 2:00. Traders will look to how close the discussion really was and what international topics were discussed.
This morning’s claims data will be watched to see if it supports the weak payroll data. Traders will continue to monitor the action in the crude pits as a strong influence on equity trading. Could be a volatile session so best to stick with the drill – stay wary, alert and very, very nimble.