Friday, September 30, 2011

Gold & Silver Morning Update

Live 24 hours gold chart [Kitco Inc.]Silver continues to consolidate this morning, currently trading near $30.40 after dipping as low as $29.80 in early trading.
Silver traded up to $31 again overnight- which seems to be keeping silver in check for now.  A tighter range trade of $29.50-$31 has developed inside of the broader $26-$34 range post smash-down.
Clearly, JP Morgan has not yet removed themselves from their massive short silver position, or we would already be seeing large and volatile moves to the upside.  The big question then is if/when the cartel will initiate a further take-down in an attempt to cover the outstanding shorts.
If the cartel intends rather on continuing the manipulation, we might well have seen the low with the $26 overnight sharp spike seen this past Monday.  From a TA perspective, $26 looks to be the capitulation low.
Regardless, anything under $30 needs to be bought in silver- $28-$29 is a steal long term, even if we get a further down-spike later. 
Professionals are accumulating INTO this weakness, and will buy more IF we see further weakness.  Waiting around for $18-$22 to make any purchase is quite simply foolish and could likely see you buying instead at $40-$50 as you chase the market if silver moves up from here.

Live 24 hours silver chart [ Kitco Inc. ]

Gold continues its consolidation as well, and is also range trading between $1575 and $1675.
Gold is finally trading closer to its long term MA's, and this will see technical buying as those who have been waiting on the sidelines for a buying opportunity jump at the chance to purchase gold back at its moving averages.
As the silver/gold ratio has widened from nearly 30:1 earlier in the year to approximately 55:1 today, traders may want to consider swapping physical gold for physical silver at this point, as we expect this ratio to narrow considerably over the duration of the bull market.

Live 24 hours gold chart [Kitco Inc.]