News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Update

Silver Explodes Higher in Asia

December 21, 2020 - (Gold Market Wire) - Silver has exploded higher in early Asian trade today. It is now up some 4.5% on the day, prior to the opening of European markets.The chart does the talking:

a massive move higher...even by Silver standards.

Gold has followed Silver's lead and is now more than 1% higher in Asian trade. While there is no single factor behind Gold's rise, one would be remiss notto mention that the continued and growing civil unrest across the world as well as the virtual disintegration of the American judicial system, laid bare by recent Supreme Court actions, are starting to impact the precious metals markets in a fundamental way. The truth, however unpalatable it may be, is that the precious metals chart has now succinctly reflected the United States Supreme Court's dismissal of challenges over an election which probably half of the population believes was fraudulent. If the rule of law disintegrates, so does public confidence in justice... and precious metals will react to that. Today is confirmation of that.

The technical factors we looked at last week, namely, the clearing of the 50-day moving average, acted as our preferred marker, and it performed well. That level held on Friday's close, which was what we really needed to set the stage for the rally. It is highly likely that we will follow through to the upside after some backing and filling, and if we can hold on to the 50-day moving average into the yearly close, we will have set the stage for the next phase of the bull market.

the 50-day m.a. held for the close Friday.

The skill will be in identifying an entry point for the trading position when we get a pullback. This type of end of year action is a double-edged sword. Low volume rips up and down can cause irrational behavior, and so we must remain cautious. We are encouraged by the chart action vis-a-vis the moving average, without a doubt, but chasing Gold is always a problem. Still, confidence, that ultimate arbiter of Gold and Silver prices, is ebbing away quickly. The US political system is facing a moment that could cause national disintegration and break up into Blue and Red political zones, with conflict in contentious areas.

Within the immediate trading perspective, we must avoid getting caught up in the emotion of the moment (core positions are there, and are core, for a reason!), and be aware that the monthly downtrend that we identified last week is still in play until $1934 is crossed and closed on. We are quickly closing in on that, and it will, no doubt, be a target. In a market like the one we are likely facing, the whipsaws could get violent, and it is advised that all margin be put on hold, except for the tiniest be established early..NOT late. Chasing up here may seem like the right move, but giving away .50-.75 of upside action will be peanuts compared to what might transpire. If the whipsaw tears the market back down and shakes you out, it will most likely rally afterwards... without you. Let's let the market clear the monthly downtrend and settle in first. There is simply too much history in this market, which is littered with the graves of those who chased strength. We are prepared lose a few dimes and quarters on the way to larger gains on the trading account. Those who swing for the fences usually swing early - - and strike out.

the all important monthly chart

A wild week awaits.

(note: the latest Corona Virus news, the lockdown of the UK, and probably other parts of the world, is going to wreck havoc in the global agriculture markets. Length in these markets is strongly advised now. The food shortage crisis is coming full steam down the track. As well as financial exposure, one must consider physical stockpiling for personal sustenance.)

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