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GOLD & SILVER Update 4th december 2012

© Florian Grummes 2012

GOLD & SILVER
Update 4th december 2012


   
                
1. Personal Note

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2. Update






Arguments for lower prices:
  • Gold failed to take out resistance at US$1,755.00
  • Gold now below 50-MA (US$1,737.77)
  • Possible ABC correction in gold underway? Would point out to a low around US$1,635.00 (if length of A wave = length of C wave)
  • Gold overall still in sideways movement (between US$1,525.00 and US$1,795.00) since September 2011
  • last COT report shows that commercials are massively short around 1,750.00US$
  • Silver lost embedded slow stochastic reading
  • Mining Stocks continue to perform weak, HUI index below 200-MA
  • Recession in europe, slower demand from china and india

Arguments for higher prices:
  • Gold breaking down below important psychologic number at US$1,700.00 but now quite oversold
  • Gold currently testing uptrend since august 2012 and uptrend from 2008
  • Lower Bollinger Band (US$1,697.01) offers strong support
  • Gold still clearly above 200-MA (US$1,665.71)
  • Despite declining prices all Gold ETF´s have seen strong demand during the last 12 days!
  • US Mint Gold American Eagle sales in november spiked vertically higher!
  • Silver is outperfoming Gold. This may signal inflationary rally (as well excessive strength in copper...)  
  • Longer term Gold in similar correction pattern like 2008/2009. Breakout to US$2,000.00 expected to happen in summer 2013
  • New uptrend in precious metals since august 2012 that should carry gold up to US$1,850.00 and 1,900.00 until spring 2013.
  • US-Dollar Death Cross (long-term 200-MA broke above its short-term 50-MA in mid of october) continues to push US-Dollar lower
  • Saisonality until spring very promising for precious metals sector
  • Never fight the FED. Unlimited QE -> money priniting all over the world will push asset prices in all sectors higher...
  • Throughout history, periods of massive money creation have always been inflationary and this time should be no different. 
  • Santa Claus/Year End Rally has been pushing stockmarket higher so far (although there have been some possible reversal signs yesterday...).

Conclusion:

  • Gold is just close below important support around US$1,696.00. I think chances are pretty good that this support will hold. There might be some more consolidation in between US$1,700.00 and US$1,740.00 before Gold is finally ready to move up again and challenge the resistance at US$ 1,800.00.
  • If instead Gold is closing below US$1,696.00 a retest of US$1,670.00 and 200-MA is in the cards. Even a break lower to US$1,640.00 - US$1,635.00 would become possible. But so far I do not expect this bearish scenario.
  • Overall I continue to believe that Gold will move up to US$1,850.00 and around 1,900.00US$ until spring 2013.
  • Fundamentally Gold is still in 2nd phase of this long term bullmarket. 1st stage saw the miners closing their hedgebooks, 2nd stage is continously presenting us news about institutions and central banks buying gold. 3rd and finally parabolic stage will bring the distribution to small unexperienced new investors who then will be acting in blind panic.

Longterm:
  • Nothing has changed
  • Precious Metals bullmarket continues and is moving step by step closer to the final parabolic phase (could start in 2013 & last for 2-3 years or maybe later)
  • Price target DowJones/Gold Ratio ca. 1:1
  • Price target Gold/Silver Ratio ca. 10:1


3. Disclaimer & Limitation of Liability

 

The above represents the opinion and analysis of Mr Florian Grummes, based on data available to him, at the time of writing. Mr. Grummes's opinions are his own and are not a recommendation or an offer to buy or sell securities. Mr. Grummes is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in the Midas Touch. As trading and investing in any financial markets may involve serious risk of loss, Mr. Grummes recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Florian Grummes is not a Registered Securities Advisor. Therefore Mr. Grummes's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction. The passing on and reproduction of this report is only legal with a written permission of the author. This report is free of charge. You can sign up here: http://eepurl.com/pOKDb

Copyright © 2012 Midas Touch Consulting, Florian Grummes, All rights reserved.