 CHARTWORKS
- Jun 27, 2011
Gold and Silver – More Range Bound Activity
Technical observations of RossClark@shaw.ca
Bob Hoye
Institutional Advisors
Posted Jun 29, 2011
It is now eight weeks since the precious metals topped and gold is producing its third Springboard alert
(oversold in a rising trend). The May 17th and June 13th alerts produced rallies of $70 and $43. Additionally,
both gold and silver have simultaneous RSI(14) readings below 40, an occurrence we like to see once prices
have been in a consolidation of five
weeks or more following an RSI
reading of 85 in the Silver/Gold
ratio. Once this oversold reading is
behind us the metals should be
capable of more sustained rallies.
The first day in silver with a higher
high can be used to identify the
upside reversal.
Gold is close to its 50 & 55 day
Bollinger Band supports ($1470 &
$1490) and silver is approaching its
7% moving average band (currently
$31.60).
These are the type of oversold and
support characteristics seen at
important lows following the tops in
2008, 2006, 2004, 1995 and 1987.
Although the metals have made new
lows for the month of June, the
majority of the mining stocks are
holding above the June 17th
bottoms. This is inverse to the price
action seen going into the April
highs when there were bearish
divergences in the miners.
Seasonally, prices should be
expected to base out in late June
through July.
The next important highs in silver
should test the upper 7% moving
average band this summer.
(Click on images to enlarge)
Silver/Gold Ratio, Gold and Silver
2008, 2006, 2004 and 1987
###
Jun 27, 2011
-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com
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