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Gold and Silver Market UpdatesClive Maund Gold Gold plunged today as the steep but orderly decline from a "Matterhorn" top gave way to a stampede for the exits as blind panic set in - normally a symptom of a bottom. The "Matterhorn" top is so called because it involves a market that ascends in a steep uptrend, then without any kind of pause to mark out a normal top distribution area, it goes into a steep decline that more or less mirrors the ascent that preceded it. The Matterhorn top is, of course, most familiar to Swiss investors.  Despite the plethora of pundits reading "the last rites" for the dollar, it did as we expected and broke higher from its base area. This development really put the boot into the Precious Metals - so much for those who loftily proclaimed that gold had "broken free from its inverse relationship with the dollar" - how can it break free of the currency it is priced in? - the notion is absurd.  Silver Silver at least had the decency to give us much more warning than gold that it was going to cave in. It marked out a rather fine Head-and-Shoulders top, although the "Right Shoulder" was deceptive as it was very stunted - we had been been looking for a larger one, but remained aware throughout that a break of the neckline of the formation at $11.50 would lead to a rout. Despite being now at strong support, we could see more downside in silver before the decline is over. Another warning was the number of commentators touting the "wonderful fundamentals" of silver.  Jun
13, 2006 Clive Maund
is an English technical analyst, holding a diploma from the Society
of Technical Analysts, Cambridge, England. He lives in Chile. Copyright ©2003-2011 CliveMaund. All Rights Reserved. Charts courtesy of StockCharts.com. 321gold Inc
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