Pressure And Energy Building In Gold Market

Gold and silver had solid finishes to the end of last week, with the yellow metal posting another positive weekly run – settling at $1,621, at the top end of the channel in which it has been trading for close to three months now. Silver had a wild session, starting around $27.50 before gaining around 30 cents, then losing 40 cents in one crazy hour of selling early afternoon, before recouping some of these losses on rumours of fresh liquidity injections from the European Central Bank, to close the week just shy of $27.70.

Eric De Groot has some good new technical analysis of the gold price. As his charts make clear, pressure and energy is building in this market, and it won’t take much in the way of bullish news – more than likely an announcement next month from the Fed of new money-printing measures – to send gold shooting higher, as the speculative shorts who’ve been bossing this market for the better part of the last year go running for cover.

The best time to buy is of course when the media herd is talking down gold’s benefits. This has certainly been the case over the last few months, given the plethora of “Is gold’s bull market over?” stories popping up in newspapers and on financial TV. And while they may be paying gold a backhanded compliment by at least deigning to mention it at all, you’ll struggle in vain to see any references to a “silver bull market” in the press, or any discussion of the benefits of owing the white metal. As the old saying goes: “the opposite of love isn’t hate; it’s indifference.”

Eric comments: “The pressure and energy building for the next advance is only matched by the number of investors giving up on gold.” Those who successfully hold and profit from their precious metal holdings will be those with a clear understanding of the long-term bullish factors, who remain unmoved by short-term price drops and bearish chatter from the media. Can you stay the course?