Gold and Silver

Interview:

• During last week's Mines & Money conference in London I gave an interview about the outlook for gold and silver. Please click Interview with commodity TV - 4th of December 2014

Conclusion:

• Gold had a big move during the last two trading days. It is now sitting right below strong resistance at US$1,240.00. I continue to see two main scenarios:

• 1st scenario (30% probability): Gold has seen the final low of this bear market early november at US$1,130.40 and is now moving up step by step. We had three short squeezes in the last three weeks and there are some higher lows and higher highs setting up on the daily chart. Monthly bollinger bands are getting tighter and collecting energy for a big move. Gold successfully tested lower monthly bollinger band (US$1,151.03). Any push towards and above the 200-MA (US$1,271.30) will increase the probabilities for a bullish scenario. In euro gold is flirting with the 1.000€-level. A breakout will set free immediate upside potential towards 1.075€. As well gold recently started to ignore the continuous strength in the US-Dollar. The Gold/Silver-ratio gave a clear reversal signal. Silver looks very good here and might not move below US$15.00 anymore.

• 2nd scenario (70% probability): Gold is creating another bull trap and remains in a bear-market. It reached my short-term price target at US$1,235.00 yesterday. But the price action has been very shaky and wild since early november, while Gold is still below US$1,240.00. Short-term sentiment is already ramping up with many Goldbugs seeing Gold now directly jumping towards US$2,000.00. Friday's CoT report will be important to figure out if the commercials have massively added to their shorts again yesterday. Technically the stochastic indicator is overbought and Gold has exactly reached the middle downtrend channel line. As well it is now moving outside its bollinger bands on the daily chart. On top there are still no clear reversal signals on the US-Dollar chart yet. While silver looks much better here Gold might still need another and final dip towards the US$1,000.00 level. Also note that if there is indeed manipulation in the gold-market they should now stop gold from moving above 1.000€!

• If you followed my advice and bought into the last dip below US$1,175.00 you should be now holding a profitable trading position. I suggest to move your stop to US$1,205.00 on an end of the day basis.