A quick post to contrast the two metals to chart their paths and where they may head next.
With gold on an uptrend, prices are currently challenging resistance at $139 for the third time. However price is above the 14 day moving average and 50dma which has been providing it with support. As such, I expect prices to drop in the short term, possibly back to the 50dma. As support has been making higher lows, I also expect a break out is in the making. Any pullback would provide a terrific buying opportunity though.
Silver price on the other hand, has soared past resistance bulling its way upwards. However, like gold, price is above the 14 dma which has been providing it with support. Despite the uptrend also intact, I expect prices to dip and take a breather as the RSI turns down, possibly back to the 14dma. With its strong run up, a correction to the 50dma would be possible as well. Again a terrific buying opportunity for anyone looking to be invested before prices head up further.
Cheers,
~K
hi kay
ReplyDeleteyou seem to be quite bullish on gold and silver? dont you think it is quite expensive and heading into a bubble? gold and silver are now are at an all-time high. do trade with care! :)
cheers
ming
Hi Ming,
ReplyDeleteThanks for reading and for your comments.
Yes, I've been bullish on silver for about 2 years now. As for expensive, it's really quite relative I feel. If debasing of currencies continue and since real assets have intrinsic values, the price would naturally have to increase in order to keep up with the debasement in order to retain this value. Hope I'm not confusing you.
You are absolutely correct though that prices may be heading for a bubble. But as for now, I feel only gold is starting to enter bubble mode. Note the word starting, which allows more time for prices to rise.
Silver on the other hand, has yet to enter bubble mode, I feel. No one's talking about it. I hardly see anything about it in the papers. Also, it's still about 40% away from its all time high which leaves quite a bit of room to run. That said, if I were to invest in one, I'd choose silver over gold for reasons, as you rightly pointed out, that gold has been making new highs ever so often.
Lastly, from my younger days as a collector, the one thing I've learnt is that the rarer a sought after object becomes, the pricier it gets. Silver falls into this boat. Gold doesn't.
Thanks for the wishes, Ming. I wish the same to you. Hope to hear your comments again. =)
Cheers,
~K