Greetings! 

There are quite a few technical analysts out there like myself who have a strong fundamental bias that defines our strategy for trading the gold market. Those who have been following my daily analysis are well aware of my bullish bias for gold. 

In an article, Louis Braham described gold as a currency. "Gold is like any other currency, with two major differences. It is more difficult to print or inflate: ramping up gold production is difficult." This logic is hard to dismiss. It has been my assumption that any currency based upon the fiat system can only move one way when paired against gold. It can only lose value over the long term. Sometimes saying something simple expresses the complexities and subtleties of a belief system. Gold is difficult to print.

That being said, today's corrective behavior in gold prices is healthy and to be expected during any prolonged rally.

I sent out a link to yesterday's KITCO commentary that I posted, but just in case you missed it, click here to read. 

As always wishing you good trading,

 

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Proper Action

GOLD  

Maintain long (1580) position. A base is forming at 1650+.  

 I am looking for a continuation of this rally. Upside target is  still 1685 for wave 1.

SILVER

Maintain Long @ 28.10

I remain modestly bullish. Silver does in fact seem to be trading in tandem with gold.  Our basic target still remains 30.80;  this is the area where I believe silver could find strong resistance. In fact silver tested this price point today with no follow through.

MARKET FORECAST

Gary S. Wagner

GOLD:In my most recent KITCO article for typical metals I wanted to explain how one develops forecasting models based upon Elliott wave and Fibonacci. All good technical analysis can accomplish is to reveal insight from analysis and identification of past patterns and cycles that might in fact reoccur. As such, the chart you see below is a very simplified forecasting model utilizing wave and retracement theory.

Do not put much weight on the model you see below. I only want to illustrate one potential possibility, and until wave 1 clearly terminates we do not have our benchmark.

SILVER: As you know, over the last couple of weeks I have been forecasting that silver should be able to trade to just below $31 per ounce specifically 30.84. Today for the first time we actually tested that area, and it did prove, at least on a interim basis, to be an area silver were would find resistance.

Copyright (c) 2011 Wagner Financial Group