Which will shine more: Gold or Silver?

January 12, 2009

By Chris Vermeulen
Last week gold and silver remained in a trading range moving sideways, while crude oil had a large pullback on very heavy volume.

Intermediate Trend of Gold – Weekly Outlook
Gold found support back in October and has since had a nice rally higher. Currently gold is trading at a resistance level, which is the downward trend line. Gold hit its head and has now started to move lower. The Stochastic indicator is indicating we are at a short term top. This is not a good time for longs to be entering or adding new positions of this metal. Waiting for a pullback and reversal would provide a much lower risk trade as well as more profit potential.

Swing Trading Gold Trends – Daily Outlook
Swing trading gold provides excellent opportunities for making consistent gains trade after trade. There are lots of high probability trades each year as we buy and sell during cycle’s bottoms and tops. By combining several indicators (Trend Lines, Equities, Bullion Ratio, MACD, and my Stochastic) and my simple to follow trading model, buy and sell signals are very clear to a trained eye.

Gold is currently moving sideways above our support trend line and I am expecting prices to dip lower and possibly generate another buy signal soon. We currently own 50% of our gold position as we booked a nice 15% profit on the first half and waiting to add to our position within the next week or two. There are several criteria, which must be met as we only want to enter gold trades when risk is under 3%.

Intermediate Trend of Silver – Weekly Outlook
Silver has been holding up very nicely over the past couple weeks and still looks like it may have a little more room to climb on the weekly chart to around the $12 level. What I am looking for is a pullback towards the support trend line and then we will use the daily silver trading chart to time our entry. Silver is currently floating in between support and resistance right now.

Swing Trading Silver – Daily Outlook
Silver has been forming a nice looking wedge, which generally indicates prices should continue higher over the intermediate term. We would like to see silver continue sideways or pullback toward our support trend line before we putting money to work.

Gold is currently trading at resistance and showing signs of short term weakness. We continue to hold our core position until we have a break of our support trend line. But if we get a reversal candle we will be looking to add to our position for another leg higher.

Silver looks to be holding up nicely but it’s currently floating between support and resistance. Risk is much too high at this level and therefore we will wait.

Crude Oil looks like it could really pop, as it has been under heavy sell pressure for a long time. Not only that but because oil is in the new, and individuals around the world are now following it, it stands a chance for a really big bounce/ rally soon. The daily oil trading chart is telling us we could have a buy signal any day now if risk is under 3%.

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