Nov 012011
 

It's been a while since our last post on precious metals. The price action right now seems to be offering a decent opportunity for a trade here.

Silver:

Silver Futures - Daily Charts

The last post on silver was on Sept 16th when Silver was around $40 and expected a decline to $26. We are labelling that as part of the third wave and the move off that low has been a struggle and it seems like a corrective pattern and hence labelling as corrective 4. If this is correct, Silver should see a drop to atleast 28.8, if not a new low to 24.5. So a high above the 28th October high would negate this view and should be used as a stop.

Gold:

The technical position for Gold is slightly different but direction is the same.

Gold Futures - Daily Charts

A move above the Oct 28th high would negate the bearish view but Gold is expected to trend lower to 1605 or 1513. A stop above 1755 is a must.

While I'm confident about these setup, the internal sub-divisions on these PM's is not ideal but I like the Dollar Index's internal sub-divisons. So I guess this should make for a neat trade.

 Posted by at 8:04 am

  18 Responses to “Precious Metals update”

  1. Hello Jai,

    Since USD index internal sub-divisions are in decent shape, can it be assumed that INR will continue to depreciate as well ? Intermarket relationships should hold, but just wanted to confirm. Thanks in advance

  2. Jai,

    I was keen to understand the stop on Silver. As you know its again on the rise now ?

    Regards Amrish

  3. Sir in rupee terms, i have taken the stop loss of 58,000 which was the high which silver made on 28th July..

  4. Got stopped out on Gold. That hurt too…

  5. Dear Jai,

    Gold trading above 1755.Is the stop on close?

    Regards
    Rahul

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