Oooh, boy. Today is shaping up to be a real doozy. The rest of this week, too. It will be important to remain calm.
News of margin hikes on Italian debt and an Italian 10-year note trading above 7% has sent global markets reeling this morning. In response, gold and silver have traded off of their highs as the world spins into "risk off" mode. Now, while I can't say for sure when the world will flip back to "risk on", I do know this: The only way out is the creation of new, paper money. Defaults, bankruptcy, "haircuts"...all lead to the same conclusion. The only tool that central banks have to forestall disaster and collapse is the printing press. Though the day-to-day machinations of the PM markets can drive you crazy with their seemingly nonsensical price moves, your only protection through this storm is physical metal. Continue to acquire it...while you still can.
Let's start with silver. No change in my forecast from earlier this week. Even though its been washed back some today, I still ardently believe that a sharp upleg is coming that will take silver to and through 37 and, from there, up to our target area of 39-41.
Though gold has been pushed back, too, the resistance certainly wasn't unexpected. My initial target from 2 1/2 weeks ago was 1780-1840 and we split the difference to call it 1810. Here's the chart from 10/25:
And here is the chart from two days ago:
So the question is, where do we go from here? In a word...higher! Gold has built a terrific base of support below it and, very soon, it will charge through 1800 and hold. From there, the next major resistance should be somewhere around 1840 and, once it gets through there, it will head back to the September highs. My initial forecast from 2 weeks ago was for a 10% rally in five weeks to 1810. We can just about call that good as gold reached 1805 yesterday. However, I like these charts very much and they're telling me there is more room to run this month. As mentioned Monday, if we can hold the line this week and close above or near 1800, we should be very optimistic about the prospects for $1900 gold before the end of the month.
OK, that's all for now. Hang in there and try to enjoy the ride. TF
p.s. John Soltez has offered to be a part of an ongoing forum thread. You can find it here:
If you have any questions for John, he will respond directly to you in this forum.
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