Technical charts are great at explaining the past
action of prices. It is more speculative to try to spot these patterns
Yet one very accurate predictor of price advances in the charts in the past
has been the so-called Golden Cross where the 50-day moving average price for
gold crosses over the 200-day moving average.
Silver prices track gold with a bias to outperformance so the Golden Cross or
Blue Cross for silver is a great indicator for price surges in the most
volatile of metals too. Bullion investor Peter Degraaf
has highlighted the price increases that have followed this indicator since
Blue Cross price increases
For 2005-6 he noted a 100 per cent increase after the Blue Cross. For
November 2007 it was 45 per cent. And for 2009 to April 2012 the multiplier
was 250 per cent. Here’s what the chart looks like now:
Just to match the last upswing would give us $130-an-ounce silver in the next
major market move. Would it not be typical of of
the capricious silver market that while most attention is now currently
focused on the potential downside, silver is actually about to give us
another huge upward price shift?
At the fundamental level everything is also in place with QE3 money printing
at $40 billion a month and counting. Perhaps next week President Obama will
be re-elected and some of the US political uncertainty begin to clear, and
then you could imagine all financial markets getting a relief rally,
including precious metals.
We may have already seen the low for silver’s trading range and now be
staring at a much larger upside than anybody is currently contemplating.
Source: Technical charts point to
$130-an-ounce silver in the coming Golden Cross upswing