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GOLD & SILVER Update 2nd of june 2013
© Florian Grummes 2013

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GOLD & SILVER
Update 2nd of june 2013

Gold Monthly Chart
Gold Daily Chart

Arguments for lower prices:

  • Despite increasing intraday volatility gold continues to behave weak. Friday´s monthly close was below US$1,400.00.
  • Still valid MACD sell signal on monthly chart.
  • Gold still in well defined downtrend.
  • If gold moves below US$1,340.00 we should see a test of US1,320.00 followed by a break of the multiyear uptrend. Already hourly close below US$1,359.00 would be critical.
  • Although gold and silver performed contra-cyclical in recent months (when compared to stocks), a very likely correction in equities could push down precious metals as well (risk off..).

Arguments for higher prices:

  • Gold seems to be working on some kind of double bottom. Confidence in a new rally is still very small therefore every attempt to rally is quickly being sold.
  • So far US$1,340.00 has not been violated. Gold is producing first series of higher lows and higher highs.....
  • Potential W-formation shapping in gold. Confirmed if gold closes above US$1,480.00.
  • Strong positive divergences in HUI Goldmining-Index increases chances that the bottom indeed is in place.
  • CoT constellation for gold and silver has strongly improved again. Commercial short position at lowest level last seen during deflationary crash in 2008. At the same time the non-commercial & small trader have built up the highest shortposition ever ...
  • Sentiment continues to be at oversold extremes (Gold Public Opinion & Hulbert Gold still at multiyear lows).
  • IWF predicts that central bank gold demand could increase up to 550 tons this year.
  • Physical gold market seems to be detached from paper speculation. Premiums especially in asia are high. ETF sales responsible for falling gold price while worldwide physical market is strong.
  • If gold & silver should continue to move contra cyclical towards stock-markets, a recovery is in the cards as the stock-markets are starting to correct.

Conclusion

  • The last two weeks have been pretty volatile but gold managed to climb higher towards US$1,420.00. On friday gold gave back all the previous gains.
  • As long as gold manages to hold above US$1,375.00 the positive outlook remains valid. Gold should then be able to challenge the lower downtrendline around US$1,440.00 soon. As well US$1,485.00 and even US$1,525.00 are possible targets within the next two months.
  • Any daily close below US$1,375.00 shifts my focus towards US$1,340.00. If this support fails the correction will continue and gold will break down below US$1,300.00.

Longterm:

  • Nothing has changed
  • Precious Metals bullmarket continues and is moving step by step closer to the final parabolic phase (could start in autumn 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
  • 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 or repatriating gold. 3rd and finally parabolic stage will bring the distribution to small unexperienced new investors who then will be acting in blind panic.
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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

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Florian Grummes 
Hohenzollernstrasse 36 
80801 München
Germany
E-Mail: info@goldnewsletter.de 
Website: www.goldnewsletter.de

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