News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
Gold Market Wire....News Analysis and Commentary for Gold Traders and Investors...Gold Market Wire
Gold Market Wire....News Analysis and Commentary for Gold Traders and Investors...Gold Market Wire
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Gold Makes Its Run to $2,000 an ounce...Target in Sight
Gold Makes Its Run to $2,000 an ounce...Target in Sight
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CME Raises Silver Margins by 12.5%
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United States Imported a Record 126.6 tonnes of Gold from Switzerland in May
United States Imported a Record 126.6 tonnes of Gold from Switzerland in May
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First Half 2020 Gold ETF Inflows Hit Record of $40 Billion
First Half 2020 Gold ETF Inflows Hit Record of $40 Billion
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Central Bank Net Gold Purchases Totalled 39.8 tonnes in May - WGC
Central Bank Net Gold Purchases Totalled 39.8 tonnes in May - WGC
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Fitch Ratings Calls 2020 "Record Year" for Sovereign Defaults
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Bank of Japan to Loan $1 Trillion into Economy
Bank of Japan to Loan $1 Trillion into Economy
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*** GOLD MARKET WIRE ***
*** GOLD MARKET WIRE ***
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Moves Above Horizontal Resistance

July 21, 2020 - (Gold Market Wire) - Gold has moved above the horizontal resistance at $1818, powered forward by Silver's increasingly powerful rally. Starting with the Gold chart the market is now clear to run and challenge its all-time high at $1921, with only a few minor points of resistance along the way. Our trend line continues to develop and it is highly encouraging. Gold's rise has been steady and progressive and it's move above the horizontal resistance has been nicely measured.

a measured rally with room to move higher

It doesn't get much more positive than this. We have slightly tweaked our up trending line because of yesterday's action, but only very slightly. The market is in a strong place now and there seems little to stop its continued rise.

While Gold's rise has been steady, Silver's, true to form, has been wild. The chart formation is starting to go parabolic, so hang on for the ride if you like your excitement of the strong variety.

two enormous gaps up.

Such moves are usually backed and filled in equally dramatic fashion, but the move in Silver is hardly surprising given how beat-down the Gold/Silver ratio had become. It's almost like it deserves to cut loose for a bit. Just to give some perspective, we show the long-term daily chart of just how far the ratio got out of line, and where we could return to.

...there's more where that came from.

For those who say that a Silver rally has nothing to do with Gold, we counter that they have been proven wrong and are about to be proven even "wronger". Silver represents real public loss of confidence in government, and judging buy the panic now taking over Silver, that confidence is plummeting. That loss of confidence, reflected in the scramble for Silver is then transmitted into the Gold arena. A real, exponential move in the price of Gold, has, as its pre-requisite an even stronger move in Silver (a small, thin, retail market if ever there was one), and therefore a narrowing of the ratio. The relationship is real and tangible. Those who trot out the "monetary metal" vs. "industrial metal" mantra have missed the point. Silver is a hyper-sensitive barometer of confidence in government. It is the real indicator of a general public loss of faith in government, because it's price is accessible. It is the alternative currency of the rank and file member of the public, and its advancement speaks political volumes for those with ears to listen.

From a trading perspective, Silver will likely whip around and kill the over-margined player (or, perhaps, anyone with any margin at all!), but for those with strong hands to buy for cash and hold with strength - rewards are ahead.

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