Silver is now at a 55 month low and gold continues to decline in Asia with a stronger dollar due to Bank of Japan’s increase in stimulus.
Dollar Strength
There are two dollar charts I want you to consider. The dollar is flirting with the 87 level at present and the chart from the last 10 years below shows we are hitting a resistance level in the 88 range.
This next chart goes back to 1975 and shows the breakout above a channel recently that could take the dollar much higher. This can continue to put pressure on the price of gold and silver.
With a fall in price for gold and silver come buyers. The U.S. Mint sales of gold coins increased for the second straight month, the first time this has occurred since January. But net long positions of the New York futures and options fell for the first time in 3 weeks.
Lots of negativity going on but there was heavy buying Thursday and Friday. With the dip in Asia overnight, I expect more buying on Monday. Gold hit $1,160 and silver $15.68 in Asia but have since bounced off those lows. Those are the numbers I would keep an eye on for Monday’s open. If we stay above them, then I expect more buying.
The scores for GLD and SLV are -90 and GDX -100 as the miners continue to crash. When will we see this trend reverse? Stay tuned.
GLD
SLV
GDX
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About Doug EberhardtDoug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
Disclosure:
Commodity Futures Trading Commission Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don’t trade with capital you can’t afford to lose. This is neither a solicitation nor an offer to Purchase/Sell futures or options. No representation is being made that any account will or is likely to achieve gains or losses similar to those discussed in this outlook. The past track record of any trading system or methodology is not necessarily indicative of future results.
All trades, patterns, charts, systems, etc. discussed in this outlook and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations. All ideas and material presented are entirely those of the author.