Gold and silver update

[Xicano]

Its been a little over a week since looking at some simple technicals. The first two photos are from today. The photo at the bottom is one I posted last month on the 24th.

Looks like gold did indeed find support where I expected it to and may indicate a possible trend change to more bullish. As mentioned http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=439x1800112">earlier, gold and silver are signaling a loss in confidence. If this is indeed an increase in the trend. My first thought is it may indicate an increase in gold being bought by governments around the world, and, probably also due to countries demanding delivery on gold they have stored in London and New York bullion vaults.

This could also show why silver isn't at the moment increasing its trend. Two things on that. First, silver has way out performed gold over the last year or year and a half. So gold can just simply be correcting to catch up. Secondly, silver isn't held by governments as a store of wealth for their country. At least not nearly as much as gold is. So again this could indicate a possible increased volume of governments buying gold or demanding delivery on gold they have stored in London and New York bullion vaults like both Korea and Venezuela have recently.

Everything in the technicals and fundamentals as far as I can tell still indicates precious metals still are going to go up much, much more whether we like it or not.

From today:

From today:

From last week:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=439&topic_id=1807906

[housewolf]

1. Very interesting...

What does "expected support" & "expect to see support" mean?

[Xicano]

2. Just technical terms

From the last week's graph I indicated where I expected to see gold stop falling in price due to where the daily candles indicated where it previously stopped falling and went back up. In technical analysis these points are called "support".

As a general rule in technical analysis where there was a previous point where the price stopped falling (called support), there is a likelihood that price will continue to hold and not drop further. However, if there is a full candle breakthrough (a candle is each one of the red or green price indicators), then that support now becomes resistance. Resistance is the point at which a price hits and won't go up further. Or think of support and resistance as a floor or ceiling and the price is a rubber ball. If the ball is falling, when it hits the floor you of course expect it to bounce back up. On the contrary if you toss a ball upward and it hits a ceiling you expect it to bounce off the ceiling and fall back down.

Now imagine the ball going through the floor. Now you can imagine it falling to next floor below and bouncing off that floor for support. Or, on the opposite if the ball goes through the ceiling its either going to lose momentum or hit the next ceiling above, and when it begins to fall again, what was once the previous ceiling is now the floor and you'd expect it to find support. I know its not the best explanation in the world, but, support and resistance, and, previous support becomes resistance or visa versa are important general rules in technical analysis. But you don't want to go off just technical analysis alone. Its best to use in conjunction with fundamental analysis. What are the fundamentals of that product? Is it a hot item, is the volume trading on it high or low? Is it a popular item, but, in a weak industry. Like for example, there might be a popular airline, but, the airline industry as a whole might not be doing so well, etc.

I also expected to see support where I mentioned earlier because I could see the trend line looked like it was going to intersect with the support line, thus, giving "two" technical reasons why the price for gold was going to stop falling at that point and start going back up.

Sorry if my explanations are bad, its just I'm trying to rush it because unfortunately I am always pressed for time. But I hope I was able to answer your question good enough housewolf. There's a lot of other stuff I use, like an oscillator called the MACD and another technical tool called fibonacci retracement. Here's a wikipedia link on support and resistance: Link


Take care housewolf.

[Xicano]

3. Oh I just remembered.

Here's a page I put together for a few friends of mine from work who expressed interest in technical analysis. Its just a page I put together embedding the group of free online videos where I learned it from. That plus I read a couple of books I ordered for my kindle. But I would I learned more from these videos than I did from the two books I read.

Here's the http://members.cox.net/zapoteca/trade_education_videos.htm">Link