July 27, 2009 – Silver has also bounced over the past couple of weeks since the last letter. In fact, silver has outperformed, rising 8.5% during this period compared to gold’s 3.3% climb.
Turning to the page-3 silver chart, there are a couple of important observations. As noted in the last letter, silver did slightly break the right uptrend line of its “V” pattern, but as expected, it did not amount to a pattern failure. These slight breaks of trends often occur in silver because it is more volatile than gold.
More importantly, silver – like gold – is now climbing higher from the right uptrend line of the “V”. My expectation is that there will likely be some ‘backing & filling’ over the next couple of weeks. But it won’t be long before silver is probing overhead resistance at $15, the red horizontal line on its page-3 chart.
In summary, we are still basically in the same situation described in recent letters. Gold and silver are in ‘no-man’s land’, waiting to break-out from long-term accumulation patterns.
To break out from this no-man’s land, gold needs to climb above $1,000. Silver once again has to hurdle its overhead resistance at $15. I expect that they will do so soon. I remain very bullish on both precious metals.
My objective is to share with you my views on gold, which in recent decades has become one of the world’s most misunderstood asset classes. This low level of knowledge about gold creates a wonderful opportunity and competitive edge to everyone who truly understands gold and money.
