How Are Gold, Silver and Miners Shaping Up?


Financial markets are in turmoil as governments toil under the strain of their excesses.

kirtley gold

We will begin with a review of the charts for gold, silver and the gold bug's index, the HUI, to see where we are now and just where we might be headed from here.

However, to put the charts into context, we need to take into consideration the surrounding political, economic and investment landscape. These are volatile times, with the financial markets in turmoil as what we perceived to be sound and secure governments now toil under the strain of their own excesses. The borrow-and-spend philosophies are coming back like a bad penny, to haunt not just those who caused this mess, but also the rest of us, who are expected to clear it up.

The follies vary from mismanagement to corruption, resulting in people taking to the street to protest the latest craze of austerity and belt tightening. Society, in general, has high expectations in terms of their standard of living, and the mere thought of it heading lower is not acceptable to them.

Take state pensions, for example: millions of people are expecting it to be there for them when they retire; however, the pension's cupboard is empty and therefore the concept of sitting back as the cheques roll in is well and truly dead in the water.

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Taking a quick look at the gold chart above, we can see that the selloff in gold prices of $60/oz has now steadied, and gold appears to be set to continue its rally. Note that both the 50-day and the 200-day moving averages are climbing gently in support. The RSI has turned north and the STO has just made a crossover, which is usually a positive sign.

Next we have the HUI, which is making steady progress despite the volatility, and is now perched just above the 200dma. Looking at the technical indicators, we can see the RSI has turned north just above the '30' level and that the STO has also turned up having dipped below '20;' again, all technical positives for the gold and silver mining producers.

kirtley gold

Turning to silver, we can see that the pullback looks to have run its course, so we are looking for silver prices to head to higher ground. The technical indicators are now out of the overbought zone, thus reducing the selling pressure on silver and allowing it space to resume its advance.

kirtley gold

In conclusion, we are of the opinion that the precious metals should once again be bought: gold, silver and their associated stocks.

As a word of warning though, it's still not clear to us whether or not the stocks will go down in the face of a broader market selloff, should it occur. So go gently and make your acquisitions on a 'layered' basis.

Finally, we are considering the purchase of a number of options trades, which should be profitable during the next move up. We believe that our decision will be made eminently.

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Have a comment? If so, please add it to this article. All opinions are welcome and appreciated.

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Bob Kirtley

DisclaimerGold Prices makes no guarantee or warranty on the accuracy or completeness of the data provided on this site. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This website represents our views and nothing more than that. Always consult your registered advisor to assist you with your investments. We accept no liability for any loss arising from the use of the data contained on this website. We may or may not hold a position in these securities at any given time and reserve the right to buy and sell as we think fit.

How Are Gold, Silver and Miners Shaping Up?

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