Written by William Kurtz, Candle Wave LLC
I think it is more likely than not that Gold and Silver have peaked and turned down. The first chart of Gold shows that it reached, and appears to have been rejected at, the 61.8% retracement of the decline from its high of last September. This is one of the usual retracement levels that we very often see in a countertrend corrective move. This is also evidence that the underlying trend in Gold is down, and is likely to remain down.
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The second Gold chart (below) shows peaking and turning Down in the ADX, in the Stochastics, and in the RSI Indicators. It’s very visual, and unmistakable.
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What we have seen in recent weeks is an “echo” of the Gold mania which drove prices to an all-time High in 2011. In that respect, Gold has “outperformed” Silver. I think that, over time, the relationship between the prices of Gold and of Silver will revert to a more “natural” or “historical” relationship; and, further, that – eventually – Platinum will again be more expensive than Gold.
The first chart of Silver shows that it has retraced 38.2% of the decline from its high of April 2011. This is another of the typical percentage retracement levels that we very often see in a countertrend move, and tells the same story as that of Gold: advancing prices have been stopped and rejected; and the underlying trend is down, and is likely to remain down.
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The second Silver chart (below) shows a Crimp (so close as to be a “Kiss”) between Indicators Chandelle 1 and Chandelle 2. This is a strong signal of an impending downtrend.
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I recognize that these forecasts of continuing downtrends in the prices of Gold and of Silver are contrary to many opinions which predict astronomical prices in these metals; but I’m going to stay with my forecasts.
Contact William Kurtz: [email protected]
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