Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
A Sloper was kind enough to offer this post about precious metals, which I appreciate!
On March 4 we reviewed the technical reasons why the gold sector was launching as opposed to blowing off. This, after articles began appearing calling the rise to that point a doomed parabolic blow off using daily charts. Those calling it a blow off were confused; silver in spring 2011 was a blow off in the terminal sense. But when a parabolic move comes off a bottom, it is an impulsive thrust to change the trend, possibly ending the bear market.
We have long noted that gold is the first mover to a new inflationary phase, as the previous deflationary backdrop gets played out. That is exactly what happened, even though the silver miners have made stunning strides in leading the exciting up move in silver that is currently in process. Silver, in taking over leadership from gold would confirm an inflationary phase. Gold is monetary and silver is an industrial commodity with monetary aspects as well; i.e. it is more positively correlated to inflated economies making the silver-gold ratio a sensitive indicator to inflation.
I’m in such a quandary about precious metals. On the other hand, SLV and GLD look fantastic long-term (and most of you have seen my silver chart, whose target seems completely plausible now, whereas a week ago it was just plain dumb). But, I gotta tell ya, looking at this gold/silver sector chart, the run-up in gold (tinted in cyan) seems like it could really use a breather!
What I’m focused on are those Fibonacci retracement levels, the most pertinent of which is highlighted above in green. We actually are pushing above it right now, but sheesh, it sure would feel better piling into gold if things would relax a little bit! The good news is that gold and silver seem to be giving a long-needed F.U. to the central bankers out there.
About a week ago, I offered a post on silver which suggested that, should it push past its horizontal resistance, the completed inverted H&S pattern would send it roaring up to its trendline. I’ve tinted the trendline below, although this certainly isn’t a specific target; it’s just there to give you the idea.
