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In a series of interviews on King World News over the past couple of months, I have been explaining my outlook for the precious metals and in particular, why I was expecting silver to reach $30 this year.
My forecast was that an upside explosion would take silver to $30 within 4-to-6 weeks when resistance at $20.50-to-$21 was finally broken. That break above resistance occurred decisively on September 22nd, so at the moment we are only about 3 weeks into the upside explosion. If my forecast continues to unfold as it has done so far, we could see $30 silver by the end of October or early November.
Consistent with this forecast was a break in the gold/silver ratio below 58, which happened this week. That is good news for both gold and silver. My expectation has been that when 58 was broken, the ratio would fall toward 50-52. A gold/silver ratio of 50 and $30 silver (if it happens) puts gold at $1500. For now we should continue to focus on these price targets. There is still no sign of a short-term top.
We are in a powerful upside breakout in both gold and silver. Give this market a lot of respect. Do that by continuing to ride the uptrend.
Gold
1) The position bought at $1369.50 on October 13, 2010 was sold on October 14, 2010 at $1374.00, which was its stop-out point. Profit: $4.50
2) Long from $1306.60 bought on the Comex spot close on September 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot gold trades at $1354.00. If stopped out, then re-buy this position if the Comex spot price the same day closes above $1366.00. (updated 14 October 2010)
Silver
1) Long from $18.369 bought on the Comex spot close on August 24, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $23.26. If stopped out, then re-buy if the Comex spot price the same day closes above $23.32. (updated 14 October 2010)
2) Long from $21.688 bought on the Comex spot close on September 28, 2010. Stop-out point: sell at an intraday stop-out point if Comex spot silver trades at $23.78. If stopped out, then re-buy if the Comex spot price the same day closes above $23.94. (updated 14 October 2010)
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