Here in the U.S., it's a holiday. The end of summer. The end of the doldrums. Well, not really. If history is any guide, however, we are about to see an increase in volatility and not just in the metals. If you thought August was wild, you're really going to love September.
So we better be prepared. The manipulated charts, which have proven so useful in identifying potential highs and lows, are going to be even more valuable in the days ahead. As a baseline, I thought I'd take the time today to post daily and weekly charts for both metals.
In gold, the weekly chart continues to show the breakout of the 3-year channel that we first identified back in July. The more time gold spends outside of this channel, the more confident we can become that it is not a "false breakout" and that a new trend channel is emerging. On the daily chart, gold has clearly moved above the midline of the "megaphone" formation we've been following. This is very bullish and would seem to indicate that a move to the top of the megaphone is just around the corner. The top line is currently slicing through the $2000 area so that, for now, has become our primary target.
Silver is still contained by the primary trend which dates back to August of last year. The real fireworks start when silver breaks out and through the top of the channel, similar to March and April. For now, that hasn't happened so I continue to have a short-term price target that mirrors the top of the channel. If/when silver breaks out of the channel again, things will get really exciting. Until then, just a steady grind higher.
Lastly, gold is up over $10 on the Globex this morning. It even traded as high as $1908 a few hours ago. I would caution you against getting too excited about this. History shows that gains made while NY is closed are typically erased once the monkeys report to their desks at the end of the holiday. Today will likely be the same. IF we make it to tomorrow at this time and gold is well over 1900, then you can get excited. Until, then, kick back, relax and enjoy the end of summer. TF