To 321gold home page

Home   Links   Editorials

CHARTWORKS - Jun 27, 2011
Gold and Silver – More Range Bound Activity

Technical observations of RossClark@shaw.ca

Bob Hoye
Institutional Advisors
Posted Jun 29, 2011

It is now eight weeks since the precious metals topped and gold is producing its third Springboard alert (oversold in a rising trend). The May 17th and June 13th alerts produced rallies of $70 and $43. Additionally, both gold and silver have simultaneous RSI(14) readings below 40, an occurrence we like to see once prices have been in a consolidation of five weeks or more following an RSI reading of 85 in the Silver/Gold ratio. Once this oversold reading is behind us the metals should be capable of more sustained rallies. The first day in silver with a higher high can be used to identify the upside reversal.

Gold is close to its 50 & 55 day Bollinger Band supports ($1470 & $1490) and silver is approaching its 7% moving average band (currently $31.60).

These are the type of oversold and support characteristics seen at important lows following the tops in 2008, 2006, 2004, 1995 and 1987.

Although the metals have made new lows for the month of June, the majority of the mining stocks are holding above the June 17th bottoms. This is inverse to the price action seen going into the April highs when there were bearish divergences in the miners.

Seasonally, prices should be expected to base out in late June through July.

The next important highs in silver should test the upper 7% moving average band this summer.

(Click on images to enlarge)

Silver/Gold Ratio, Gold and Silver

2008, 2006, 2004 and 1987

###

Jun 27, 2011
-Bob
Hoye
Institutional Advisors
email:
bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com

Hoye Archives

The opinions in this report are solely those of the author. The information herein was obtained from various sources; however we do not guarantee its accuracy or completeness. This research report is prepared for general circulation and is circulated for general information only. It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in this report and should understand that statements regarding future prospects may not be realized.

Investors should note that income from such securities, if any, may fluctuate and that each security's price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Neither the information nor any opinion expressed constitutes an offer to buy or sell any securities or options or futures contracts. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in this report. In addition, investors in securities such as ADRs, whose values are influenced by the currency of the underlying security, effectively assume currency risk. Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.

321gold Ltd