The Phaserl


Gold Has Trashed a Key Support

by Rick Ackerman, Rick

With a scary bank crisis in Cyprus driving the headlines a couple of weeks ago, gold could barely muster a rally. Notice in the chart below that the high of the move failed to clear a minor peak at 1619.70.  Had it done so, we would have given bulls a fighting chance, since it would have created a bullish “impulse leg” with the potential to power quotes as much as $120 higher in just a few weeks.  Instead, buyers showed themselves to be gutless, allowing the April contract to relapse down to within inches of the lower trendline. It could hold, but we doubt it. [Note:  I have updated the chart to show that the breakdown we’d expected has in fact occurred, and decisively.]

Still worse is that a breakdown is likely to send the futures down to at least 1553.50, a Hidden Pivot support identified here a couple of weeks ago when the futures were trading above 1600. If that “hidden” support should fail as well, look out below, since the next stop would be a more important one at 1487.00 that was flagged at the same time. That would represent a 5.5% fall from current levels, which would hardly be disastrous. But it would also turn a trendline that has provided support since July of 2011 into resistance, opening a path to significantly lower prices into autumn.

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5 comments to Gold Has Trashed a Key Support

  • Anon

    The importance of owning BOTH gold and silver (and maybe platinum, too?)

    I became aware of precious metals, as an “investment” (inflation-hedge) in late 2010, when I was looking around for a “fail-safe” investment. I had too little money to invest, to take any chances. My “gut” instinct was to buy gold. I bought two ounces of gold, in late 2010, early 2011. Then, I read Chris Duane’s article “The Silver Bullet and the Silver Shield”, on his website “”, and, became very excited about silver, as a way to protect what little “investment” money I had ($10,000.00). IF I had continued to invest in gold, in early 2011 (outside of the timeframe when it was trading around $1,900.00 per ounce), I’d have gained at least $3,000.00 on my initial $10,000.00 investment. Instead, with silver at $27.00 per ounce (currently), my overall investment ($15,000.00 since early 2011 – all in silver) is DOWN $4,138.00. SGT: What IF, TPTB continue to hammer down the price of silver, indefinitely, while gold continues to climb? (Hint: There are going to be A LOT OF PISSED OFF SILVER HOLDERS!)

    RSVP, please!

    • harman kardon

      Anon–If you believe for a minute that silver will continue trading at a 55/1 ratio to gold, then you should sell all of your silver now and exchange it for gold or platinum or whatever you feel is best. The gold/silver ratio is what brought me into silver in the first place. I, too, joined the SLA in late 2010 with a little more fiat than yourself. I, too, am all in with silver and a small portion of gold. Today I exchange for gold more so than silver, simply because my gold holdings are so small–I want more gold and have quiet a few ounces of silver. TPTB are a criminal organization and, currently, have a tight grip on ALL markets and ALL economic indicators–see the BLSBS from earlier today. Can they maintain this indefinitely? NO, simply because the Eastern world is moving away from USD’s and towards gold and silver as a medium of exchange. Look at Turkey, Iran and India–BRICS should to be respelled with an additional “I” for Iran. They are very much a part of the consolidation happening with the productive/emerging countries that make up the BRIICS. Why have all the central banks–especially the ones with an Eastern flavor–been adding to their gold holdings? Simple, the Yuan/Rembini will very soon be the reserve currency backed by gold. Or as Jim Willie stated in the last two interviews he did, there will be a BRIICS BIS bank that will settle global trade in gold and the gold price is going to be around $7,000 per ounce. So, do not throw in the towel or do what is best for you and your family. My wife is finally on board and finally sees the nightmare coming down the trail. Thank God. She finally understands that gold and silver must be part of a long term strategy or else we could be wiped out completely. “Gold is money and nothing else.” J P Morgan. Silver is, by definition of the Constitution of the United States of America, money as well. Silver has been “the peoples money” for as long as gold has been the money of kings.

    • dmts

      N.B. I’m a casual but well informed observer/investor, this is just my take on it…

      @Anon – It’s worth noting the divergence of physical markets from the futures products which is starting to emerge. As SLV goes down (as is our current trend), physical sellers are not following suit to the same extent. The premiums are rising very quickly in comparison. You’ve only got to take a quick browse on eBay or other indy sellers to realise that sellers of 1oz coins are not shifting with this price move. Essentially the demand is still there for the product, as is evident from mint figures from around the world.

      Market manipulation is three things: obvious, rampant and frankly irrelevant. Since you seem to have been sensible enough to buy the real thing, worrying about the price of a futures contract denoted in a Fiat currency is not worth losing sleep over.

      SLV can go to close to zero for all I care. I’ll continue to stack as the price goes down (if premiums allow), as this metal is not just an affordable store of wealth but a genuine industrial commodity too. At some point fundamentals will have to play a part in both the gold and silver markets, let alone whether at some point metal was forced to be monetized once again somewhere in the world.

      Frankly whether it’s the yellow or the white metal it’s a lot better than paper. Full stop… unless you plan to trade it back someday, but then that’s not why most of us get in to this game is it?


      • Anon

        dmts: “Anon” here. I like your answer. Better to be holding the white or yellow metal, than nothing (ie, FRN’s), after the collapse.

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