Saturday, September 15, 2007

Silver and Gold

Above is a daily chart of Gold and Silver. As you can see, gold is now testing its high from last year. I've been looking for gold to test this level for many months but I wasn't able to catch this last leg up in gold because I was involved in a few other projects outside of trading.

In the lower pane is a chart of silver. Notice how silver is making a series of lower highs and lower lows. In my opinion in order for gold to sustain this rally and breakout, silver needs to break its downtrend and begin to make higher highs.

It will be interesting to see if gold will pull silver up or will silver drag gold back down like it did during the months of April, May and June. Gold is also benefiting from a lower dollar.

I don't see any low risk trades in gold or silver right now so I will stand aside and wait for the next opportunity in the metals to present itself.


Andrei said...

I have not done this yet, possibly when i get back to my bloomberg machine.. but have you ever done any research on gold/silver/s&p points whenever there was a change in interest rates? This Tuesday is one of those days. Lets see what happens.. hopefully now what happened in 87. Check the charts, pretty similar, depends on who you ask.

Gary said...

Silver did the same thing in 05. It is such a thin market that I don't put much stock in technical patterns. I pay much closer attention to what the commercial traders are doing in the futures market. They have one of the smallest net short positions in years right now.


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